Why Is North Carolina Trying to Charge Extra For Clean Cars?


After announcing a bill that would ban Tesla from selling its cars in North Carolina without going through dealerships, and closing the state’s electric car charging stations, the “Old North State” now wants to impose a fee of $50 and $100 on hybrid and electric cars, respectively, because they don’t pay the same amount in gasoline tax as drivers of less efficient traditional cars.

The North Carolina Senate proposed a budget that calls for an increase in registration fees for these more energy-efficient cars, which will offset some of the benefits of clean cars, and may even reverse the trend toward buying more fuel-efficient vehicles.

On its face, it's reasonable for electric owners to contribute toward road tax in some way, but this tax seems very arbitrary given that it will not produce significant revenue. North Carolina has only 30,000 hybrid or electric cars.

Clean car advocates such Jay Friedland, legislative director for the advocacy group Plug In America, have proposed delaying the fees until the vehicle numbers reach a critical mass of 100,000. "We generally say this is a period of time when you should be incentivizing these vehicles, but after a while, yes, everyone should be paying their fair share," he said.

"I think so far what we're seeing is the trend seems to be either an additional annual fee or some type of registration fee seems to be much more popular than the miles-driven tax, because that is a newer technology and raises some privacy concerns," said Kristy Hartman, a transportation and environment analyst at the National Conference of State Legislatures. The NCSL estimates that gas taxes contribute 40 and 90% to highway revenues at the state and national levels, respectively.

Sen. Neal Hunt (R-Wake) defended his bill: "It just seems logical to me that they should pay a small fee for the use of the highways and the wear and tear they put on the highways.” 

But that policy, is only one part of what is beginning to seem a multi-pronged attack on electric vehicles in the state. North Carolina has also announced the end to the pilot program offering four interstate plug-in stops.

In addition, a separate bill would bar call sellers like Tesla from "using a computer or other communications facilities, hardware, or equipment" to sell or lease a car to anyone in the state, effectively outlawing Tesla’s internet-based sales model. By making it illegal to bypass dealerships and sell directly in the state, the proposal cuts at the heart of Tesla’s business advantage. Opponents say that the state should not dictate who can sell automobiles and how they can be sold.

“They’re trying to insulate the dealer franchise model from any competition,” said Diarmuid O’Connell, Tesla’s vice president for corporate and business development. “It’s a protectionist move to lock down the market so we have to go through the middleman – the dealer – to sell our cars.”

While it is unclear whether any of these bills will survive a State House vote, they are indicative of a worrisome trend that risks undercutting the progress made to clean up the automobile industry.