Do electric vehicles need subsidies? A comparison of ... · Do electric vehicles need subsidies? A comparison of ownership costs for conventional, hybrid, and electric vehicles Hanna

Do electric vehicles need subsidies? A comparison of ownership costs for conventional, hybrid, and electric vehicles

Hanna L. Breetza and Deborah Salonb

Draft Prepared for the TE3 Conference September 25, 2017

a School of Sustainability, Arizona State University Address: 800 S. Cady Mall, Tempe, AZ 85287 Telephone: 480-727-0408. Email: [email protected] b School of Geographical Sciences and Urban Planning, Arizona State University Address: 975 S. Myrtle Ave, Tempe, AZ 85287 Telephone: 480-965-7475 Email: [email protected]

Abstract

Battery electric vehicles (BEVs) are an important pathway for decarbonizing and reducing petroleum dependence in the transport sector. Although one barrier to adoption is the higher purchase price, advocates suggest that savings in fuel and maintenance can make BEVs economical over time. This paper presents a comparison of the five-year total cost of ownership for the most popular conventional, hybrid, and electric vehicles for 14 U.S. cities from 2011-2015. The findings identify spatial variation in costs due to differences in state subsidies, state and local fees, fuel prices, insurance and maintenance costs, depreciation rates, and vehicle miles traveled. Overall, the BEV’s higher purchase price and rapid depreciation outweighed its fuel savings in nearly all cities. Extensive sensitivity analyses highlight key parameters and assumptions. Under virtually all reasonable assumptions, federal and state incentives were critical for the electric vehicle to be cost competitive with the hybrid or conventional vehicles.

Keywords

Total cost of ownership; Battery electric vehicles; Hybrid vehicles; Resale value; Fuel economy

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1. Introduction

U.S. adoption of battery electric vehicles (BEVs) has grown rapidly in recent years, supported by

a $7,500 federal tax credit, state and local policy incentives, expanded charging infrastructure,

and innovations in vehicle and battery technology. Early adopters choose BEVs for a variety of

reasons, including protecting the environment, reducing oil dependency, and saving on fuel costs

(Center for Sustainable Energy, 2013). But many potential BEV adopters are deterred by the

“sticker shock” of higher purchase prices (Liao et al., 2017; Deloitte, 2011). In general, the

Manufacturer’s Suggested Retail Price (MSRP) for BEVs tends to be $8,000-$16,000 higher

than comparable internal combustion engine vehicles (ICEVs).

BEV advocates emphasize that these vehicles can be economical over the long term, as

high purchase prices are offset by policy incentives and low operating costs. Since consumers

often underestimate long-term savings (Allcott and Wozny, 2014; Krause et al., 2013; Greene,

2010), providing information about potential savings is often seen as a low-cost tool for

encouraging BEV adoption. Fuel cost savings, in particular, tend to be emphasized by

educational websites and cost calculators offered by governments, utilities, environmental groups,

electric vehicle advocacy groups, automakers, and universities.1 The U.S. Department of Energy

also developed an online Vehicle Cost Calculator2 based on Total Cost of Ownership (TCO)

modeling to provide consumers with even more comprehensive cost estimates. Recently, some

scholars further suggested that standardized vehicle TCO labels may help alleviate the perception

1 Examples include the U.S. Department of Energy’s website on “Saving on fuel and vehicle costs” (https://energy.gov/eere/electricvehicles/saving-fuel-and-vehicle-costs), Nisssan’s “Leaf Savings Calculator” (https://www.nissanusa.com/leaf-electric-car/savings-calculator), the “EV Explorer” tool developed by the University of California, Davis (http://gis.its.ucdavis.edu/evexplorer/), Pacific Gas & Electric’s (PG&E) Plug-In Electric Vehicle Calculator (https://www.pge.com/en/pevcalculator/PEV/index.page), Southern California Edison’s Plug-In Car Rate Assistant (https://www.sce.com/nrc/pev/index.html), and the Sierra Club’s “Electric Vehicles: Myths vs. Reality” site (https://content.sierraclub.org/evguide/myths-vs-reality). 2Available at: https://www.afdc.energy.gov/calc/

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of high BEV costs and “nudge” consumers towards BEVs (Wu et al., 2016; Dumortier et al.,

2015; Siddiki et al., 2015).

This paper addresses two critical questions related to BEV costs and policy: Now that we

have several years of data on BEV costs, including resale values, does it appear that drivers

actually save money with BEVs compared to hybrid electric vehicles (HEVs) or conventional

internal combustion engine vehicles (ICEVs)? How much does BEV cost competitiveness

depend on government subsidies?

We answer these questions with an empirical comparison of five-year ownership costs for

three representative vehicles – Nissan Leaf (BEV), Toyota Prius (HEV), and Toyota Corolla

(ICEV) – across 14 major US cities. In order to estimate ownership costs as realistically as

possible, we use a five-year ownership period (2011-2015) and city-specific data on vehicle

mileage, fuel prices, insurance costs, maintenance and repair costs, resale values, and taxes, fees,

and subsidies. We examine both the spatial variation in ownership costs, as well as the relative

importance of various cost components (e.g., net capital costs, fuel and operating costs, and

policy-related costs and subsidies). We also conduct extensive sensitivity analyses that explore

the impact of fuel prices, discount rates, depreciation rates, length of ownership, and driving

behavior – and explore what it would have taken for the Leaf to achieve cost-competiveness

without the federal subsidy.

We find that although ownership costs varied considerably across cities, the Leaf cost

substantially more than the Corolla in all cities and more than the Prius in all but one city. A

principal reason is that the Leaf depreciated faster than the gasoline vehicles, losing more in

resale value than it gained in fuel savings in the first five years. In addition, the Leaf’s higher

purchase price resulted in higher sales tax, ad valorem taxes, and insurance costs. Sensitivity

analyses demonstrate that an owner may save money with the Leaf compared with the Corolla or

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Prius, especially if they have access to free or reduced-rate charging. Government incentive

programs were still necessary, however, for the Leaf to achieve cost competitiveness.

These results contribute valuable policy insights. First, under virtually all reasonable

assumptions, the $7,500 federal tax credit is critical for BEVs to be cost competitive with

conventional cars. Since the tax credit is projected to be phased out for the most popular BEVs

by 2020, those who wish to support BEVs will need to find alternative strategies for consumer

outreach other than emphasizing their fuel cost savings. Second, by highlighting the geographic

variation in BEV cost components, these results suggest some opportunities for state and local

policy to help “level the playing field” for BEVs. These opportunities include adjustments on

sales taxes, depreciation schedules for ad-valorem taxes, carbon taxes, and electricity rate

regulations. Lastly, this work suggests that the simplicity of fuel savings calculators may mislead

consumers into thinking they will save money with BEVs. Consumers may save money

depending on their individual circumstances, but fuel savings are only one factor in net

ownership costs. Information-based policy initiatives, such as labeling or consumer outreach,

must take more local and individual factors into account.

2. Literature Review

This section briefly reviews the TCO literature to contextualize our contribution. For full

technical reviews of TCO modeling, see Roosen et al. (2015) and Contestabile et al. (2011).

TCO analyses aim to estimate all costs associated with owning an asset over its lifetime.

When applied to vehicles, these studies often compare the costs of conventional and alternative

fuel vehicles. Although this sounds straightforward, the variation in parameters and assumptions

across vehicle TCO studies means that “results are often misleading” (Roosen et al., 2015) and

there is “little consensus on the TCO value or payback period” (Al-Alawi and Bradley, 2013).

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For example: studies variously interpret vehicle lifetime as 10 years, 15 years, or 20 years, while

a few consider a shorter ownership period of 5-7 years; some studies only include vehicle

purchase and fuel costs, while others include additional operating and maintenance costs; many

studies assume no residual value, others assume fixed depreciation schedules across all cars,

while a few look at market-based residual value. In fact, Roosen et al. (2015) found that only two

out of 44 studies included all the relevant private costs of vehicle and battery purchases, fuel,

charging infrastructure, maintenance, insurance, taxes, and credits from resale or residual value.

This paper addresses three aspects of consumer vehicle costs that are understudied in the

TCO literature. First, there is a startling lack of attention to spatial variation. Although a few

studies consider costs for one state (Parks, 2007) or city (Peterson et al., 2011; Hao et al. 2015),

the vast majority use national averages for parameter values – and none examine variation

across cities. Estimating cost variation across cities is a significant contribution of this study.

Second, existing TCO studies often pay minimal attention to policy-related costs. Many

studies exclude taxes and fees, assuming that they will be similar across vehicle types. Taxes

that vary with vehicle value, such as sales tax or ad valorem taxes, are also excluded from many

studies (e.g., Miotti et al., 2016). No TCO studies provide a truly comprehensive analysis of

policy-related costs. In contrast, we consider a wide array of policy-related costs and incentives,

including tax credits and exemptions, purchase rebates, sales and excise taxes, title fees,

registration fees, ad valorem taxes, use fees, and EV taxes and fees.

Third, the models used in the majority of the TCO literature do not necessarily accord

with realistic vehicles, driving behavior, and ownership periods. Most use software toolkits that

simulate hypothetical vehicles rather than empirically analyzing actual vehicles. Many assume

higher-than-typical driving mileages as well as lifetime ownership. Empirical studies with

shorter ownership periods tend to use auction price data to estimate residual value (e.g., Gilmore

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and Lave 2013; Allcott and Wozney 2014), which likely underestimate the value that owners can

negotiate in a private sale, while only a few consider resale from the consumer perspective

(Al-Alawi and Bradley, 2013). Overall, by attempting to provide a realistic, comprehensive, and

empirically-grounded analysis of consumer ownership costs, this study provides a useful

complement to the modeling that makes up most of the TCO literature.

3. Methodology and Data

This section specifies the case selection criteria, cost equations, and key data sources. Because

this analysis aims to approximate actual ownership costs, the assumptions diverge from existing

TCO studies in two key ways: (1) shorter ownership periods and (2) city-specific data for

operating and maintenance costs, policy-related costs, vehicle miles traveled, and resale values.

3.1 Case Selection

3.1.1. Vehicles

This analysis compares the most popular ICEV, HEV, and BEV according to U.S. sales: Toyota

Corolla, Toyota Prius, and Nissan Leaf. We use the 2011 model year since that is when the Leaf

was first available, providing a full five years of data. In estimating new and used values, we

specified mid-trim models with comparable features (Corolla LE, Prius II, Leaf SV). These three

vehicles are similar in size and performance.3

3.1.2. Ownership Period

Many TCO analyses assume that vehicles are owned for the entire 10- to 20-year vehicle lifetime

3 Since the Corolla is classified as compact, while the Prius and Leaf are mid-size, Gilmore and Lave (2013) use the mid-size Toyota Camry as the benchmark for comparison with the Prius. However, the size and performance of the Corolla, Prius, and Leaf are quite similar, while the Camry has a larger body, larger engine, and higher horsepower.

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(see Roosen et al., 2015 for a review). Because new cars are typically only owned for 5-8 years,

however, calculating costs over a shorter period is more realistic. It particularly highlights the

importance of depreciation rates. The five-year ownership period in this study comprises fiscal

years (FY) 2011-2015, with cars sold at the start of FY2016. We use FY accounting (July-June)

to ensure that the $7,500 federal tax credit is counted in the first year of ownership and not

discounted.

3.1.3. Cities

The analysis considers the 14 U.S. metropolitan statistical areas (MSAs) for which the Bureau of

Labor Statistics (BLS) reports monthly gasoline and electricity prices: Atlanta, Boston, Chicago,

Cleveland, Dallas, Detroit, Houston, Miami, Los Angeles, New York, Philadelphia, San

Francisco, Seattle, and Washington, DC.

3.2. Equations for Five-Year Total Cost of Ownership (TCO)

We calculate the year-one capital costs of a new vehicle as:

where CC is capital costs, PP is purchase price, STX is sales tax, TF is title fee, and TXC are tax

credits or rebates that offset capital costs.

Annual fuel costs for the gasoline vehicles (ICEV and HEV) are calculated as:

where F is annual fuel cost, Pgas is

the price of gasoline ($/gallon), VMT is annual Vehicle Miles Traveled per vehicle, Rcity is the

ratio of driving on city streets, Rhwy is the ratio of driving on highways, and MPG is miles per

gallon (mi/gal) for city and highway driving.

Annual fuel costs for the BEV is estimated as: where

F is fuel cost, Pelec is the price of electricity ($/kWh), VMT is annual VMT per vehicle, and MPK

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is the fuel economy measured as miles per kilowatt-hour (mi/kWh).

Additional annual costs include registration, insurance, maintenance, repairs, and state

and municipal taxes and fees. At the end of the ownership period, total costs are reduced by the

vehicle resale value. Costs in years two through five as well as the resale value are discounted

using a 7% rate. Overall, the formula for TCO of new vehicles is:

where TCO is the Total Cost of Ownership, PP is the purchase price, STX is sales tax, TF is the

title fee, TXC are tax credits, N is the vehicle ownership period (5 years), F is annual fuel costs,

TX is annual taxes and fees, I is annual insurance cost, MR is annual maintenance and repair

costs, RV is the resale value at the end of the ownership period, and r is the annual discount rate.

We assume a 7 percent discount rate for the baseline analysis and conduct sensitivity analyses

for 0, 5, 10, and 15 percent discount rates.

3.3 Key Parameters and Data Sources

Table 1 summarizes the data sources and assumptions for key parameters.

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TABLE 1: Key Parameters and Data Sources

Parameter Data Source and Years Notes

Purchase price Manufacturer’s Suggested Retail Price (MSRP), 2011

$17,300 for the Toyota Corolla SE; $20,050 for the Toyota Prius II; $32,780 for the Nissan Leaf SV

Purchase incentives

Federal BEV tax credit, 2011 $7,500

State BEV rebates, 2011 $500 in Pennsylvania (Philadelphia); $2,500 in California (Los Angeles; San Francisco); $4,000 in Illinois (Chicago); $5,000 in Georgia (Atlanta)

State sales tax exemptions, 2011 BEV exemption in Washington (Seattle) BEV and HEV exemption in Washington, DC

Sales tax State, county, and local policy, 2011a Ranged from 6.0% (Detroit; Miami; Washington, DC) to 9.75% (Seattle), with a mean of 7.5%.

Annual taxes and fees

State, county, and local policy, FY 2011-2015a

Includes registration fees, value-based taxes (e.g., personal property taxes, ad valorem taxes, annual excise taxes), flat use taxes and fees (e.g., license plate fees, ‘wheels’ taxes, local persmissive taxes, decal fees), inspection or abatement fees, and BEV taxes.

Gasoline prices Average monthly regular gasoline prices from the U.S. Bureau of Labor Statistics (BLS), 2011-2015b

Average nominal gasoline prices ranged from $2.90/gallon (Houston) to $3.63/gallon (Los Angeles), with a mean of $3.19/gallon. Note: we also conduct sensitivity analyses for higher gasoline prices.

Electricity prices Average monthly residential electricity prices from the U.S. Bureau of Labor Statistics (BLS), 2011-2015b c

Average nominal electricity prices ranged from $0.096/kWh (Seattle) to $0.215/kWh (San Francisco), with a mean of $0.149/kWh. Note: we also conduct sensitivity analyses for free and reduced-rate charging.

Fuel economy Adjusted fuel economy ratings from the U.S. Environmental Protection Agency (EPA)d

Toyota Corolla: 26 mpg (city), 34 mpg (highway) Toyota Prius: 49 mpg (city), 46 mpg (highway) Nissan Leaf: 34 kWh per 100 miles

Vehicle miles traveled (VMT) per vehicle

National Household Transportation Survey (NHTS) conducted by Oak Ridge National Laboratory, 2009e

Ranged from 9,869 miles (Seattle) to 12,470 miles (Detroit) per year, with a mean of 11,435 miles. Note: we also conduct sensitivity analyses to identify the annual VMT that yields cost parity between vehicles.

Ratio of city to highway driving

Federal Highway Administration (FHWA), 2013f

Highway driving ranged from 32% (Chicago) to 51% (Dallas) of total driving, with a mean of 41%.

Insurance, maintenance, and repair costs

Kelley Blue Book ‘5-Year Cost to Own’ and Edmunds ‘True Cost to Own’ estimates for each city, 2016g

Five-year estimates for new vehicles in 2016 were deflated to FY 2011-2015 dollars.

Resale Value Kelley Blue Book and Edmunds resale value estimates, July 2016h

Mean five-year resale values in nominal dollars: Toyota Corolla: $7,681; Toyota Prius: $9,172; Nissan Leaf: $5,215. Note: we also conduct sensitivity analyses with varying depreciation rates.

a We use the applicable taxes and fees for the major municipality in each MSA. The data sources are complex and include personal communication with government staff. See Appendix A for further details.

b Monthly BLS data on gasoline and household electricity prices are available through the “back data” links at https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm

c We did not include the additional cost of installing higher-voltage home chargers, as they are not necessary for BEV ownership. Home chargers cost an average of $1,354 (Idaho National Laboratory, 2015)

d U.S. EPA’s fuel economy database is available at: http://www.fueleconomy.gov/feg/findacar.shtml e We use the ‘best estimates’ rather than ‘self-reported.’ Available at: http://nhts.ornl.gov f “Highway Statistics 2013” from the Office of Highway Policy Information, available at:

https://www.fhwa.dot.gov/policyinformation/statistics/2013/hm72.cfm g Available at: https://www.kbb.com/new-cars/total-cost-of-ownership/ and https://www.edmunds.com/tco.html h Available at: https://www.kbb.com/whats-my-car-worth/ and https://www.edmunds.com/appraisal/. We use city-specific locations and mileage

and take the average resale value for two sale types (trade-in and private sale).

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4. Results and Discussion

The results for five-year TCO for each vehicle and city are shown in Figure 1. The colors

indicate different cost categories, while the gray bar shows how much these costs were offset by

federal and state subsidies.

FIGURE 1: Five-year TCO by City and Car

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Spatial variation in policy, driving behavior, and operating costs led to substantially

different TCO across cities. The five-year TCO for the Corolla ranges from $25,177 to $29,078;

for the Prius, $28,237 to $31,875; and for the Leaf, $30,061 to $36,899. Ownership costs in the

most costly cities were nearly 20% higher than in the least costly cities, illustrating the

importance of incorporating local factors into TCO analyses (and calling into question the

approach of standardized TCO labeling policies). Tax policies and purchase incentives, in

particular, were a major source of variation in ownership costs for the Leaf.

Despite this variation, the Leaf cost substantially more than the Corolla in all cities. This

was true even where there were generous BEV subsidies, or a large potential for fuel savings due

to high gasoline prices or VMT. On average, over five years the Leaf cost $6,561 more than the

Corolla under assumptions of average electricity prices. As we discuss further in the sensitivity

analyses, even with free electricity the Leaf cost an average of $4,024 more than the Corolla.

The Leaf was also costlier than the Prius in all but one city. On average, the Leaf cost

$3,520 more than the Prius over five years, assuming average electricity rates. The two cars

were comparable in cost, however, where BEVs received large state subsidies. This includes

Seattle and Chicago, where the Leaf’s cost premium was slightly less than $600, and Atlanta,

where the Leaf saved $320 compared to the Prius. Thus, with substantial state rebates or tax

exemptions, the Leaf could be competitive with the Prius. Yet while these incentives were

necessary for cost parity, they were not sufficient. The Leaf still cost more than the Prius in

California cities, despite the state’s $2,500 BEV rebate.

These findings contradict the notion that vehicle owners should expect to save money

with BEVs. As we discuss in the sensitivity analyses, consumers may save money if their

individual circumstances are favorable (high VMT, high gasoline prices, low electricity prices,

etc.). But the baseline results show that the ‘typical’ new car buyer in 2011 – who owned a new

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car for five years, sold it in average condition, drove average distances, and paid average fuel

prices – would save thousands of dollars by buying a Corolla or Prius instead of a Leaf.

Moreover, without the $7,500 federal tax credit, the Leaf would not be remotely cost-competitive

with the gasoline cars.

Although much of the public discourse around BEVs focuses on fuel cost savings, the

Leaf’s fuel cost savings were modest unless the owner had access to reduced-rate or free

charging. Assuming average electricity prices, the average five-year fuel cost savings of the Leaf

were $3,102 compared to the Corolla and only $899 compared to the Prius. In cities with high

electricity rates, charging the Leaf at average rates cost nearly as much as fueling the Prius.

Instead of fuel savings, the difference in ownership costs is fundamentally driven by

capital costs. Despite the $7,500 federal tax rebate, and even with various state subsidies of

$500-$5,000, the Leaf had comparatively high net capital costs. One important, but often

overlooked, factor was sales tax. Many TCO studies do not consider how BEVs’ higher MSRP

leads to higher sales tax costs. But an extra $15,000 of purchase price at an 8 percent tax rate

means an additional $1,200 in sales tax. This can cancel out a few years of fuel savings.

An even more important factor in net capital costs is vehicle depreciation. Most TCO

studies either ignore depreciation or assume constant depreciation rates across vehicle types

(Roosen et al., 2015). But depreciation rates are a major determinant of five-year ownership

costs. Whereas the Corolla retained 44% of its value and the Prius retained 40% of its value, the

Leaf retained only 16% of its MSRP after five years (23% of the net purchase price after the

federal tax credit). There are many potential reasons for this rapid depreciation. Secondary

owners cannot take advantage of tax incentives, and they may also expect to replace the battery

(approximately $6,000) within a few years. In addition, demand for older BEVs is likely

depressed by rapid innovation in vehicle and battery technology. Since these trends may or may

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not persist as the BEV market matures, we explore a range of depreciation rates in a sensitivity

analysis in Section 5.4. But regardless of the reason for rapid depreciation, we find that it

outweighed the Leaf’s fuel savings within this five-year period. This is an important finding and

a critical topic for future research.

5. Sensitivity Analyses

The results presented in the previous section are ‘best guess’ five-year ownership costs. This

section presents the results of several sensitivity analyses. First, we assess how the results are

affected by assumptions about fuel prices and discount rates, as well as the interaction of these

factors. Next, we analyze more complex counterfactual analyses for one city, Los Angeles, with

different scenarios for VMT, gasoline prices, vehicle depreciation rates, and ownership lengths.

Lastly, to assess the importance of policy support, we analyze what it would take to achieve

Leaf-Corolla and Leaf-Prius cost parity in the absence of tax incentives.

5.1 Fuel Prices

Here we examine how the Leaf’s cost-competitiveness is affected by more favorable fuel price

assumptions, i.e., lower electricity rates and higher gasoline prices. Although there is precedence

in the literature of estimating BEV charging costs with average residential electricity rates (e.g.,

Prud’homme and Konig, 2012), many BEV owners have opportunities for lower cost charging

(Center for Sustainable Energy, 2013, 2016).4 For example, BEV owners who charge at home

may have access to time-of-use pricing or discounted off-peak rates for BEVs, which could

reduce their electricity rates by 50% or more, while BEV owners who charge away from home 4 BEV charging rates may also be higher than average residential prices. Not all utilities offer time-of-use or discounted BEV rates – and if utilites have a tiered rate structure, adding a BEV may actually increase a household’s electricity rate. In addition, for-profit charging stations (e.g., in high-demand urban centers) may charge rates as high as $0.80/kWh, nearly seven times the average residential electricity rate.

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may have access to “free” charging (e.g., charging stations offered by municipalities, shopping

centers, or automobile dealers) or reduced-rate charging (e.g., stations at workplaces with

industrial or commercial rates). To determine the Leaf’s relative costs under most favorable price

conditions, we analyze ownership costs for a scenario with free electricity.

As for gasoline, we note that prices were high from 2011 to 2013 but low in 2014 and

2015. Since a vehicle buyer in 2011 might reasonably have assumed that gasoline prices would

remain high, we analyze three higher gasoline price scenarios: (1) a “steady” scenario, in which

gasoline prices in each city remained at the relatively high average FY 2011 price for five years,

(2) a “growth” scenario, in which gasoline prices in each city began at FY 2011 prices and grew

by $0.25/gallon each year over FY 2012-2015, and (3) a “spike” scenario, in which gasoline

prices in all cities began at $4.00/gallon in FY 2011 and jumped to $5.00/gallon for FY

2012-2015. The “growth” and “spike” scenarios represent gasoline prices that are historically

unprecedented but not entirely implausible (White, 2011). Averaged across the cities, these three

scenarios resulted in additional five-year gasoline costs of $683/$1,497/$2,689 for the Corolla

and $416/$912/$1,689 for the Prius in discounted 2011 dollars.

Figure 2 illustrates the results of these interacted fuel price sensitivity analyses. The box

plots show the range and quartile distribution of the Leaf’s cost premium compared to the

gasoline cars (Corolla and Prius) for two electricity price scenarios (average rates and free

electricity) and four gasoline price scenarios (actual prices, “steady,” “growth,” and “spike”).

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FIGURE 2: Five-year cost premium of the Leaf under different fuel price scenarios.

Average electricity prices Free electricity

Leaf vs.

Corolla

Leaf vs.

Prius

Under average electricity prices (left column), the Leaf continued to have a substantial

average cost premium compared to the Corolla and Prius regardless of the gasoline price. Even

in the “spike” scenario, the Leaf cost an average of $3,902 more than the Corolla and only

reached cost parity with the Corolla in the city with a $5,000 BEV state rebate (Atlanta). The

“spike” scenario did enable the Leaf to achieve savings compared to the Prius in the three cities

with the largest BEV subsidies: $2,224 savings in Atlanta, $863 savings in Chicago, and $692

savings in Seattle. But across the other 11 cities, the “spike” scenario merely reduced the Leaf’s

average cost premium over the Prius from $4,445 to $2,787 – so long as electricity prices

remained at average residential rates.

Under assumptions of free electricity (right column), the results become more nuanced.

Here we see how the Leaf’s cost-competitiveness depends on the interaction of electricity and

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gasoline prices as well as state subsidies. Consider the comparison of the Leaf and Corolla

(upper right quadrant). Under “actual” or “steady” gasoline prices, the Leaf always cost more

than the Corolla – even with free electricity. When free electricity was combined with the

gasoline price “growth” scenario, the Leaf became a few hundred dollars cheaper than the

Corolla in the two cities with $4,000-$5,000 BEV rebates (Atlanta and Chicago). Free electricity

and the gasoline “spike” scenario brought the Leaf to cost parity in Seattle as well. Thus, a

combination of free electricity, historically high gasoline prices, and generous state subsides

could make the Leaf an economical choice compared to the Corolla.

The comparison of the Leaf and Prius (lower right quadrant) is especially sensitive to free

electricity and high gasoline price assumptions. Overall, the Leaf with free electricity compared

favorably with the Prius: its average cost premium was only $1,021 with “actual” gasoline prices

and $605 with “steady” gasoline prices, and it saved an average of $292 with gasoline price

“growth” and $618 with a gasoline price “spike.” However, there are important differences based

on the extent of BEV subsidies. In cities with high subsidies (Atlanta, Chicago, Seattle), the Leaf

saved at least $500 under all gasoline price scenarios and as much as $2,000-$4,500 under a

gasoline price spike. In cities with moderate subsidies (Los Angeles, San Francisco), the Leaf

achieved cost parity (i.e., within $500 higher or lower than the Prius) under “actual” or “steady”

gasoline price scenarios, and cost savings of roughly $400-1,200 under “growth” or “spike”

scenarios. In cities with smaller BEV subsidies (Washington, DC and Philadelphia), the Leaf

only reached cost parity under “growth” or “spike” scenarios. Lastly, in cities without subsidies,

free electricity reduced the Leaf’s cost premium, but still did not bring it to cost parity with the

Prius even under a gasoline price “spike”.

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5.2 Discount rates

The baseline analysis uses a 7 percent discount rate. Here we examine how the Leaf’s cost

premium varies with four discount rates (0, 5, 10, and 15 percent) under two electricity price

scenarios (average rates versus free electricity). The results are summarized in Figure 3.

On the whole, varying the discount rate does not change the overall findings. Interestingly,

though, its effect is somewhat counterintuitive. We expect high discount rates to ‘hurt’ efficient

vehicles (i.e., increase their relative costs) because it reduces the value of the fuel savings that

accrue over time. This holds true when comparing the Leaf with free electricity to the Corolla –

i.e., when fuel savings are at a maximum. However, when assuming average residential

electricity rates, or comparing the Leaf with the Prius, we find the opposite: high discount rates

reduce the Leaf’s cost premium. This effect is driven by the discounting of resale values. The

lower resale value of the Leaf meant that it was not as affected by higher discount rates.

FIGURE 3: Five-year cost premium of the Leaf assuming different discount rates and electricity prices.

Average electricity prices Free electricity

Leaf vs.

Corolla

Leaf vs.

Prius

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5.3 Vehicle Miles Traveled

The baseline analysis assumes that each vehicle is driven the average annual VMT for each city.

However, because the Leaf and Prius have lower operating costs than the Corolla, they may

attract buyers who drive more than average. Indeed, the 2009 National Household Travel Survey

finds that hybrid and alternative fuel vehicles are driven approximately 1,000 miles more per

year than their conventional counterparts. For some buyers, then, lower variable costs may

compensate for higher fixed costs.

Table 2 presents the annual VMT needed to achieve Leaf-Corolla and Leaf-Prius cost

parity given various fuel price assumptions. We focus on one city, Los Angeles, in order to best

illustrate the effect of multiple price variations.

TABLE 2: Annual Vehicle Miles Traveled (VMT) that yields discounted cost parity between vehicles in Los Angeles, assuming different gasoline and electricity price scenarios.

Leaf-Corolla Leaf-Prius

Average gasoline and electricity prices 37,138 135,047 50% lower electricity prices 21,162 18,068

Free electricity 16,167 11,139 50 cent increase in gasoline price 22,877 31,158 $1 increase in gasoline price 16,514 17,624 Free electricity and $1 increase in gasoline price 10,481 7,163

At actual average prices, the vehicles need to be driven 37,138 miles per year to achieve

Leaf-Corolla cost parity – and a whopping 135,047 miles per year to achieve Leaf-Prius cost

parity. The reason that it takes such high VMT to achieve cost parity between the Leaf and Prius

is that their fuel costs are similar. For reference, the cost parity mileage between a Prius and

Corolla is quite high as well, at 24,214 miles annually.

The main takeaway is that unless a Leaf buyer has access to free charging, the amount of

driving required to achieve cost parity with either a Prius or a Corolla is more than most owners

18

regularly drive. High gasoline prices coupled with free electricity are the scenario in which the

Leaf – with its subsidies – has a clear cost advantage at common VMT levels.

5.4 Depreciation

A large cost difference between the three vehicles is their depreciation rate. After five years, the

vehicles were worth 45% (Corolla), 40% (Prius), and 23% (Leaf) of their original net purchase

prices (nominal dollars). The 2011 Leaf lost value especially rapidly. However, this may not

mean that a new Leaf today will lose value rapidly. The 2011 model year was the first for the

Leaf and its new technology, and the vehicle has become more robust and reliable over time.

Here, we again use Los Angeles to illustrate how the vehicles’ costs would compare if all

depreciated at the lowest (55% over 5 years) and at the highest rate (77% over 5 years). If the

Leaf owner pays average residential electricity rates, the Corolla remains the most economical

vehicle choice regardless of the depreciation rate scenarios (Table 3). However, if all vehicles

depreciated at the same rate, the Leaf would have a lower 5-year TCO than the Prius under

reduced electricity costs. Further, if the Leaf owner has access to free charging, the Leaf can

even become more economical than the Corolla over 5 years of ownership.

TABLE 3: Five-year Total Cost of Ownership (TCO) for each vehicle in Los Angeles, assuming different depreciation rates and electricity prices.

Actual Depreciation Low Depreciation High Depreciation

Corolla $ 29,097 $ 29,098 $ 31,798 Prius $ 31,852 $ 31,089 $ 34,687 Leaf $ 35,322 $ 31,766 $ 35,322 Leaf, 50% electricity cost $ 33,282 $ 29,726 $ 33,282 Leaf, free electricity $ 31,817 $ 28,261 $ 31,817

5.5 Length of Ownership

Our baseline analyses assumed a 5-year ownership period. While this is a common short-term

ownership period used in TCO studies (e.g., Al-Alawi and Bradley, 2013; Gilmore and Lave,

2013; Faria et al. 2012; Gass, Schmidt, and Schmidt 2012), owners of efficient vehicles might

19

hold onto them longer to maximize fuel savings. To explore the costs of ownership over longer

periods, we project future costs using the following assumptions for ownership in Los Angeles:

• Each year, the Corolla and Prius lose value at the rate of 5% of the original MSRP. • Each year, the Leaf loses value at the rate of 5% per year of the original MSRP minus

tax credits. Under this assumption, the Leaf has no remaining value by Year 10. • Fees continue to be collected at decreasing annual rates due to reduction in vehicle

value. • All vehicles are driven 11,240 miles per year. • The fuel economy of all vehicles remains constant over time. • Fuel prices remain steady at 2015 levels for the next five years. • Insurance prices remain steady at 2015 levels for the next five years. • Maintenance and repair costs are an average of the predictions by Edmunds and Kelley

Blue Book for the first five years of ownership, and as found in the Consumer Expenditure Survey for the second five years of ownership.

• An additional cost for battery replacement was added to both the Prius and the Leaf, spread over ownership years 6-10.

• Both costs and resale value are discounted at 7% per year.

Using these assumptions, we projected the TCO of each vehicle for years 5-10 (Figure 4). The

least expensive vehicle continues to be the Corolla, and the most expensive continues to be the

Leaf given average electricity rates. However, for owners with access to free electricity, the Leaf

becomes slightly cheaper than the Prius over longer ownership periods.

FIGURE 4: Projected Total Cost of Ownership (TCO) for five to ten year ownership periods

20

5.6 Could the Leaf be cost competitive without a subsidy?

The final sensitivity analysis explores the effect of a set of realistic-but-optimistic assumptions

that reduce the cost of the Leaf substantially and increase the fuel cost for the gasoline-powered

vehicles, while removing all subsidies for the Leaf. These assumptions were:

• Capital: The planned length of ownership is 10 years. All vehicles depreciate at the Corolla’s actual depreciation rate through 2015, and at 5 percentage points of depreciation per year thereafter.

• Annual taxes and fees were set at the average across 14 cities. • Insurance costs were set at the average across 14 cities. • Maintenance: Battery replacement costs are cut in half (down to $1500 for the Prius and

$3000 for the Leaf). Other maintenance costs were set at the average across 14 cities. • VMT: Vehicles are driven 15,000 annually for years 1-5 and 12,000 annually for years

6-10. • Fuel prices: The price of gasoline rises to $4/gallon for 2016-2020. Electricity prices are

the lowest among the cities sampled (approximately 10 cents/kwh), and stay constant through 2020.

• The discount rate is reduced to 3%.

Figure 5 illustrates how the components of cost compare across vehicles in this scenario.

Immediately evident is that annual taxes and fees, insurance, and maintenance costs are similar

across the vehicles, but capital and fuel costs vary dramatically. The suite of assumptions - most

notably $4/gallon gasoline - brings the Corolla and Prius to cost parity. To bring the Leaf to cost

parity with the lower capital cost hybrid and conventional vehicles, however, high gasoline

prices and low electricity prices are not enough.

21

FIGURE 5: 10-year Total Cost of Ownership (TCO) in Los Angeles,

with BEV-favoring assumptions but no state or federal subsidies.

6. Conclusions and Policy Implications

Consumers buy electric vehicles for a variety of reasons, including concern about the

environment, about oil dependence, or because the vehicles are seen as status symbols (Axsen

and Kurani, 2013; Center for Sustainable Energy, 2013, 2016). However, financial savings is

cited as one of the strongest motivators of consumer interest in hybrid and electric vehicles

(Center for Sustainable Energy, 2016; Gallagher and Muehlegger 2011; Jenn, Azevedo and

Ferreira, 2013). It is understandable, then, that education and outreach emphasizes fuel savings.

Our work raises critical concerns about whether this approach to BEV advocacy

accurately reflects the relative costs of BEV ownership. The Leaf’s fuel savings were dwarfed by

its high purchase price and associated sales tax, as well as faster depreciation. State and federal

subsidies were necessary to reach cost competitiveness with the Prius – but even $10,000 of

incentives was not sufficient for the Leaf to reach cost competitiveness with the Corolla unless

combined with very low electricity costs.

22

In addition, this work highlights heterogeneity in costs across major US cities, due to

variation in state and local taxes and fees, as well as the costs of fuel, maintenance, and

insurance. Across all 14 cities, ownership costs had a range of 16% for the Corolla, 13% for the

Prius, and 23% for the Leaf. The range in ownership costs was especially pronounced for the

Leaf, as its costs were most strongly affected by state and local policy.

6.1 Limitations

Since policies and prices fluctuate, the years chosen for this study affect the generalizability of

the results. One reason is that tax policies fluctuate over time. Since 2011, several states (e.g.,

Massachusetts) have added $2,500 tax credits that were not captured in this analysis, while other

states (most notably Georgia and Illinois) have repealed their generous $4,000-5,000 tax credits.

In addition, ten states have introduced special EV taxes of $50-150 per year to make up for

reduced gasoline tax revenue. Since tax incentives have a large impact on ownership costs, this

means that results for 2011 vehicles will not be precisely correct for other model years. Unless

the relative fuel prices and/or purchase prices of these vehicle types changes dramatically,

however, the main contours of the results presented in this paper will remain informative.

These results also reflect the vehicles chosen for analysis. We focused on the dominant

vehicles in each category because their relative costs have important implications for mass BEV

adoption. We also chose to compare vehicles of similar size. However, the second choice vehicle

for potential BEV consumers may not look much like the BEV they consider. Our results would

be substantially different if we used a luxury vehicle or SUV as the benchmark gasoline car.

A final caveat is that this analysis focused on the initial model year of the Nissan Leaf,

which had a slightly higher purchase price than subsequent model years and also experienced

rapid depreciation. In the future, the cost decline of lithium-ion batteries (Nykvist and Nilsson,

23

2015) may lead to BEVs with lower purchase prices and improved cost competitiveness. BEVs

may not become more cost competitive, however, if automakers use the gains from innovation to

introduce BEVs with larger batteries at the same cost, rather than lower-cost cars with the same

battery capacity. Although our study is retrospective, it suggests that automakers’ decisions on

battery capacity and purchase price will strongly affect BEV’s future cost competitiveness.

6.2 Policy Implications

As of August 2017, there are 461 federal, state, and local policies that support BEVs in the US,

including tax incentives, regulations, reduced parking fees, free or reduced-fee charging,

demonstration programs, and access to high occupancy vehicle (HOV) lanes.5 These policies

have been effective in stimulating initial adoption of BEVs. At the same time, they have their

drawbacks. These incentives can become costly for taxpayers as the scale of BEV adoption rises.

Moreover, their benefits are often enjoyed by wealthier members of society, leading to questions

of equity. For these reasons, large-scale subsidies are not politically sustainable in the long term.

The $7,500 federal tax credit is set to phase out for each automaker after they sell 200,000 BEVs,

which is projected to begin over 2018-2020. State tax policies are changing as well, as

escalating budgetary costs lead to political backlash (Stokes and Breetz, 2017).

We acknowledge that BEVs are not an environmental panacea. If, however, policymakers

determine that mass adoption of BEVs is desirable for achieving air quality standards or

decarbonizing transportation, they will need to devise policies that can support BEV adoption

once large-scale subsidies are phased out. This paper highlights a variety of small policy options,

some of which can be implemented at the state or local level. States with large value-based taxes

(e.g., sales, property, or ad valorem taxes) may consider reducing the tax rates or taxable value of 5 U.S. Department of Energy, Alternative Fuels Data Center. ‘All laws and incentives sorted by type.’ Retrieved August 24, 2017 from http://www.afdc.energy.gov/laws/matrix?sort_by=tech

24

BEVs in order to reduce ownership costs. For example, annual ad valorem taxes could be applied

to market-based appraisals rather than fixed depreciation schedules to reflect the faster

depreciation of BEVs. Implementing energy- or emissions-based taxes (e.g., carbon taxes, Btu

taxes, gas guzzler taxes) would also slightly reduce the cost premium of BEVs, as they tend to be

more efficient and less carbon-intensive than HEVs and ICEVs. Providing low-cost charging,

either directly through municipal charging or indirectly through utility regulations, is also critical

for improving the cost competitiveness of BEVs. Overall, our no-subsidy sensitivity analysis

suggests that without the federal subsidy, a whole basket of these policies may be necessary to

bring BEVs to cost competiveness. One policy that our paper does not support, however, is

mandatory TCO labeling; to the contrary, our study suggests that spatial variation and sensitivity

to fuel prices, VMT, and ownership length may make TCO too variable for standardized labels.

In addition to these “carrots,” mass adoption of BEVs may also require regulatory

“sticks” (Siddiki et al., 2015). In the past, federal Corporate Average Fuel Economy (CAFE)

standards and state Zero Emission Vehicle (ZEV) mandates provided an impetus for automakers

to commercialize HEVs and BEVs. In the future, as federal and state subsidies are inevitably

phased out, such regulations will likely continue be an important policy instrument, especially if

they push automakers to produce the low-cost cars that are most affordable for mass consumers

rather than higher performance BEVs with continued high purchase prices.

25

Acknowledgements

The authors thank Gil Tal and Bryan Leonard for providing constructive comments on the

manuscript. Errors are, of course, the sole responsibility of the authors.

Funding

This research did not receive any specific grant from funding agencies in the public, commercial,

or not-for-profit sectors.

26

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Appendix A: Policy-Related Taxes, Fees, and Subsidies, FY 2011-2015 Atlanta, GA

Category Type of tax/fee Summary

One-time taxes, fees, or subsidies

(July 2011)

Sales or excise tax

In 2011, the Georgia state sales tax was 4%, and local and county sales taxes were 3%, for a total sales tax of 7%.i However, motor vehicles were not subject to this general sales tax. Instead, motor vehicles incurred an annual ad valorem tax at registration (see below). Since it is paid in lieu of sales tax, we count it as sales tax in year one and an annual value-based tax in years two through five. Beginning on March 1, 2013, the annual ad valorem tax was replaced by a one-time Title Ad Valorem Tax (TAVT) for newly title vehicles.ii However, vehicles titled in Georgia prior to this policy change continued to pay the annual ad valorem tax.

Title fee $18

EV subsidies BEVs purchased or leased by June 30, 2015 qualified for a $5,000 state rebate.

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee Annual registration fees comprised a flat fee of $20 plus the ad valorem tax (see below) and EV tax (see below).

Value-based tax

The annual ad valorem tax is known as the “birthday tax” because it is due on the owner’s birthday. For simplicity, we assume that this falls at the start of each fiscal year. This means that the calendar year tax rate is assumed to be the same as the fiscal year tax rate. Tax rates are set by counties in the form of annual “millage rates.” We use the millage rates for DeKalb County: 2011 (40.90), 2012 (44.44), 2013 (45.39), 2014 (45.34), and 2015 (45.29).iii A millage rate of 100 implies a tax rate of 0.10 or 10% of vehicle value. Vehicles values for every make, model, and model-year are determined each year by the Georgia Department of Revenue. iv Unlike other states, Georgia did not use a fixed depreciation schedule. Instead, taxable vehicle values were intended to represent 40% of appraised value, based on a combination of retail (“blue book”) and wholesale (“black book”) values.

Inspection fees

EVs and all vehicles three years or newer were exempt from inspections. Annual inspections begin in the fourth year. Dedicated alternative fuel vehicles, including BEVs, need safety inspections. Gasoline vehicles, including hybrids, need both smog and safety inspections. Prices are set by local mechanics but must not exceed $24 for emissions tests and $12 for safety inspections.v

EV taxes/fees $200 per year, beginning on July 1, 2015 Other taxes/fees N/A

30

Boston, MA

Category Type of tax/fee Summary One-time

taxes, fees, or subsidies

(July 2011)

Sales or excise tax Massachusetts sales tax of 6.25% applied to retail sales of vehicles.vi Local excise taxes were not collected upon vehicle sales, but were instead levied as an annual ad valorem tax (see below).

Title fee $75 vii EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

$25 per 1-year registration or $50 per 2-year registration until July 1, 2014, when fees were raised to $25 per 1-year registration or $60 per 2-year registration.viii We assume 2-year registrations in 2011 and 2013 and a 1-year registration in 2015.

Value-based tax

The State of Massachusetts requires local governments to levy an annual excise tax on motor vehicles. By statute, the tax rate is set at $25 per $1,000 of vehicle value. It applies to a depreciated vehicle value: 90% of MRSP in the model year, 60% in year two, 40% in year three, 25% in year four, and 10% in year five and later.ix

Inspection fees The motor vehicle inspection fee was $29 per year until July 1, 2014, when fees were raised to $35 per year.x BEVs are exempt from annual inspections.

EV taxes/fees N/A Other taxes/fees N/A

Chicago, IL



(July 2011)

Sales or excise tax

The total motor vehicle sales tax was 9.75%, including the 6.25% state sales tax, 1.25% home rule tax in the City of Chicago, and 1.25% home rule tax and 1.0% Regional Transportation Authority (RTA) tax in Cook County.xi A Cook County ordinance in February 2011 also added a $15 excise tax on the retail sale of new vehicles.xii

Title fee $95

EV subsidies

From 1998 through 2013, BEVs were eligible for a $4,000 state rebate through the Illinois Alternative Fuels Rebate Program (technically, the rebate amount was 80% of the incremental cost of an alternative-fuelled vehicle versus its conventional counterpart up to $4,000, which was effectively $4,000 for all BEVs). In March 2014, the Illinois Environmental Protection Agency suddenly halted the program due to lack of funds.

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee The state license plate renewal fee was $99 per year in 2011-2012 and $101 per year in 2013-2015. BEVs receive a discounted registration ($18 per year or $35 per 2-year registration).

Value-based tax N/A

Inspection fees

EVs do not require any inspections. Gasoline-powered vehicles are also exempt from inspections for the first three years, after which they must get emissions tests every two years. Emissions tests are free. Even model-year vehicles are typically tested in even years; odd model-year vehicles are tested in odd years.xiii

EV taxes/fees N/A

Other taxes/fees

Chicago charges an annual “wheels tax,” also called the “city sticker,” which functions as a municipal registration fee. For passenger cars, this tax was $75 in 2011, $85 in 2012-2013, and $85.97 in 2014-2015. Since 2014, the tax rate has been adjusted every two years for the Consumer Price Index.

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Cleveland, OH



(July 2011)

Sales or excise tax The total sales tax rate for motor vehicles was 7.75%, which includes a 5.5% State of Ohio sales tax, 1.25% Cuyahoga County sales tax, and 1% Greater Cleveland Regional Transit Authority tax.xiv

Title fee $15 EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

The state registration fee was $34.50 per year, comprised of a $20 license plate tax, $11 highway safety fee, and $3.50 service fee.xv In addition, a county “permissive tax” (see below) is also due at registration.

Value-based tax N/A

Inspection fees Inspections are not required statewide, but passenger vehicles five years and older need an annual emissions inspection in the Cleveland metropolitan area. Tests cost $18 per year. BEVs are exempt.xvi

EV taxes/fees N/A

Other taxes/fees The motor vehicle “permissive tax” is an optional tax that counties and/or tax districts can levy on vehicle registrations. Cuyahoga County’s permissive tax was $20 per year during this period.xvii

Dallas, TX



(July 2011)

Sales or excise tax Texas collected the 6.25% state sales tax on the purchase of motor vehicles.xviii Local sales taxes do not apply to motor vehicles.

Title fee $33 in counties that are part of the Texas Emissions Reduction Plan, including all counties in the Dallas metropolitan area. xix

EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fees

In July 2011, the base registration fee for passenger vehicles model-year 2008 and newer was $58.80. On September 1, 2011, this was reduced to $50.75 for all cars and light trucks.xx Additional fees due at registration include a $10 Dallas County fee, $1 automation fee, $1 Department of Public Service fee, and $1 insurance verification. Since March 1, 2015, the state portion of vehicle inspection fees has also been collected at registration (see below).

Value-based tax N/A

Inspection fees

All passenger vehicles must have annual inspections. EVs and vehicles newer than two years old only need safety inspections; gasoline-powered vehicles 2-24 years old also get emissions tests. The two-year safety inspection sticker for new vehicles costs $23.75 ($7 station fee and $16.75 state fee). Thereafter, annual safety inspections for EVs cost $14.50 ($7 station fee and $7.50 state fee), and annual safety and emissions inspections for gasoline vehicles cost $39.75 (in Dallas County, $31.50 station fee and $8.25 state fee).xxi Although fee levels did not change over the study period, the manner of collection did change.xxii Prior to March 1, 2015, the inspection station collected the entire fee and passed the state fee to the state. Effective March 1, 2015, the station only collected its fee, and the motorist paid the state fee at registration.


32

Detroit, MI


taxes, fees, or subsidies (July 2011)

Sales or excise tax The Michigan state sales tax of 6% applied to motor vehicle sales. There were no local sales taxes at the time.

Title fee $15 plus $3 Title Application Service Fee EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

The state collected two flat fees at registration: $5.75 service fee for the Transportation Administration Collection Fund (TACF) and a $2.25 fee for the Traffic Law Enforcement Safety Fund (TLESF).xxiii The main registration ‘fee’ is an ad valorem tax (see below) due on the owner’s birthday. We assume that this birthday falls at the start of the fiscal year, which allows for 12-month registration periods.xxiv

Value-based tax

Michigan’s annual ad valorem tax is applied in $5 increments based on $1,000 increments of vehicle value. MSRP determines the initial tax amount: $88 for the Corolla, $118 for the Prius, and $163 for the Leaf. At the second registration, the tax drops to 90% of the original amount. The third registration is 90% of the second amount (i.e., 81% of the original tax). The fourth and all subsequent registrations are 90% of the third amount (i.e., 73% of the original tax). xxv

Inspection fees N/A EV taxes/fees N/A Other taxes/fees N/A

Houston, TX



(July 2011)

Sales or excise tax Texas only collected the 6.25% state sales tax on the purchase of motor vehicles.xxvi Local sales taxes did not apply to motor vehicles.

Title fee $33 in counties that are part of the Texas Emissions Reduction Plan, including all counties in the Houston metropolitan area. xxvii

EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

In July 2011, the base registration fee for passenger vehicles model-year 2008 and newer was $58.80. On September 1, 2011, this was reduced to $50.75 for cars and lighter pick-up trucks. xxviii Additional fees due at registration include the $11.50 Harris County fee, $1 automation fee, $1 Department of Public Service fee, and $1 insurance verification. Since March 1, 2015, the state portion of inspection fees has also been collected at registration (see below).

Value-based tax N/A

Inspection fees

All passenger vehicles get annual inspections. EVs and vehicles newer than two years old only need a safety inspection; gasoline-powered vehicles 2-24 years old also get an emissions test. The two-year safety inspection sticker for new vehicles costs $23.75 ($7 station fee and $16.75 state fee). Thereafter, annual safety inspections for EVs cost $14.50 ($7 station fee and $7.50 state fee), and annual safety and emissions inspections for gasoline vehicles cost $39.75 (in Harris County, $25.50 station fee and $14.25 state fee).xxix Although fee levels did not change over the study period, the manner of collection did change.xxx See the entry for Dallas for more details.


33

Los Angeles, CA



(July 2011)

Sales or excise tax On July 1, 2011, the state sales tax dropped from 8.25% to 7.25%.xxxi Local sales tax rate added another 1.5%, for a combined sales tax rate of 8.75% at the beginning of FY 2011.xxxii

Title fee $19

EV subsidies California’s Clean Vehicle Rebate Program provided rebates for the purchase or lease of new hydrogen, electric, and plug-in hybrid vehicles. For EVs, the rebate amount was $2,500.

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

The base registration fee was $46 per year during the entire period. Additional annual fees due at registration are the California Highway Patrol fee ($23 in 2011-2013, raised to $24 on January 1, 2014), Reflectorized License Plate Fee ($1 until January 1, 2015, when it was changed to a one-time fee collected at initial registrationxxxiii), Service Authority for Freeway Emergency callbox fee ($1), county Air Quality fee ($6-7 depending on zip code), Auto Theft and DUI fee ($1), and fingerprint fee ($1).xxxiv In addition, the state collects the value-based Vehicle License Fee at registration (see below).

Value-based tax

The Vehicle License Fee is an annual fee collected with registration in lieu of a property tax. The rate was reduced from 1.15% to 0.65% of vehicle value on July 1, 2011. Initial vehicle value is set by market value, based on the bill of sale, title, or Kelley Blue Book estimate, rounded to the nearest $100. The value is depreciated over 11 years: Year 1 (100%), Year 2 (90%), Year 3 (80%), Year 4 (70%), Year 5 (60%), Year 6 (50%), Year 7 (40%), Year 8 (30%), Year 9 (25%), Year 10 (20%), Year 11 and onwards (15%).xxxv

Inspection fees

New gasoline vehicles pay an annual $20 Smog Abatement Fee for the first six years, after which they get a smog test every two years. Prices for tests are set by private testing stations. New alternative-fuel vehicles, including EVs, pay an annual $8 Smog Abatement Fee for the first six years and do not need tests thereafter.xxxvi

EV taxes/fees

In order to use the High Occupancy Lane with only 1 passenger, EVs have the option to purchase a Clean Air Vehicle decal. This decal was $8 through the entire study period. We did not include this fee in our analyses, since it is optional.

Other taxes/fees N/A

34

Miami, FL



(July 2011)

Sales or excise tax Florida state sales tax of 6% applied to motor vehicles. Some counties also charged a discretionary sales surtax on the first $5,000 of the sale amount. In Miami-Dade County, this sales surtax rate was 1%.xxxvii

Title fee $75.25 EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

The first time that an owner registers any vehicle, they pay an initial registration fee of $225 plus a license plate fee of $28. If they later transfer these plates to another car, they only pay a $7.35 license plate transfer fee. This registers the vehicle until the owner’s birthday, when they begin paying regular annual registration fees. We assume that the cars in this study are not an owner’s first car, such that we only count the license plate transfer fee but not the initial registration fees. We also assumed that the owner’s birthday fell at the beginning of the fiscal year, allowing for simple 12-month registrations. The annual base registration “tax” is based on vehicle weight. Fees for three weight categories (2,499 pounds or less, 2,500-3,499 pounds, and 3,500 pounds or more) were respectively $19.50, $30.50, and $44.00 until September 1, 2014, when fees were reduced to $14.50, 22.50, and $32.50. All three vehicles in this study fell into the middle category. In addition to this base fee, there are thirteen additional statutory fees, surcharges, and service charges collected at registration. We estimate that these fees totaled $27.90 per year until September 1, 2014, when they were reduced to $14.35 per year.xxxviii

Value-based tax N/A Inspection fees N/A EV taxes/fees N/A

Other taxes/fees After the first year of ownership, vehicle owners pay an annual license plate tax of $10, along with a $5 processing fee.

New York, NY



(July 2011)

Sales or excise tax The total sales tax in New York City was 8.875%, including 4% state sales tax, 4.5% city sales tax, and 0.375% Metropolitan Commuter Transportation District sales tax.xxxix

Title fee $50 EV subsidies N/A

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

Registration fees vary with vehicle weight. xl Registration fees were $45.50 per two years for the Corolla, $48.50 per two years for the Prius, and $55.00 per two years for the Leaf. When a vehicle is registered for the first time, a $25 license plate fee is also collected. In addition, at registration, residents of New York City boroughs and counties pay a use tax of $30 per two years and a supplemental transit district fee of $50 for two years.

Value-based tax N/A

Inspection fees Safety inspections for all vehicles cost $10 per year. Emissions tests for the New York City metropolitan area cost $27 per year; EVs and first-year gasoline vehicles are exempt from these emissions tests.


35

Philadelphia, PA



(July 2011)

Sales or excise tax The total sales tax was 8%, including 6% state sales tax and 2% city sales tax.xli

Title fee $51

EV subsidies Through September 2011, the Pennsylvania Department of Environmental Protection provided a $500 rebate for alternative-fuel vehicles, including BEVs and PHEVs.xlii

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee $36 per year through the entire study periodxliii Value-based tax N/A

Inspection fees

All vehicles get an annual safety inspection. Emissions inspections are not required statewide, but in Philadelphia gasoline vehicles must get annual emissions inspections after their first year. Prices are set by local garages. We estimate that safety inspections cost $25 per year and combined safety/emissions inspections cost $70 per year. xliv


San Francisco, CA



(July 2011)

Sales or excise tax On July 1, 2011, the state’s base sales tax dropped from 8.25% to 7.25%.xlv Local sales tax rate added another 1.25%, for a total sales tax rate of 8.5% at the beginning of FY 2011.xlvi

Title fee $19

EV subsidies California’s Clean Vehicle Rebate Program provided rebates for the purchase or lease of new hydrogen, electric, and plug-in hybrid vehicles. For EVs, the rebate amount was $2,500.

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

The base registration fee was $46 per year during the entire period. Additional annual fees due at registration are the California Highway Patrol fee ($23 in 2011-2013, raised to $24 on January 1, 2014), Reflectorized License Plate Fee ($1 until January 1, 2015, when it was changed to a one-time fee collected at initial registration), Service Authority for Freeway Emergency callbox fee ($1), county Air Quality fee ($6), Auto Theft and DUI fee ($1), fingerprint fee ($1), Abandoned Vehicle fee ($1), and County Transport Project fee ($10). xlvii In addition, the state collects the value-based Vehicle License Fee at registration (see below).

Value-based tax

The Vehicle License Fee is an annual fee collected with registration in lieu of a property tax. The rate was reduced from 1.15% to 0.65% of vehicle value on July 1, 2011. Initial vehicle value is set by market value, based on the bill of sale, title, or Kelley Blue Book estimate, rounded to the nearest $100. The value is depreciated over 11 years: Year 1 (100%), Year 2 (90%), Year 3 (80%), Year 4 (70%), Year 5 (60%), Year 6 (50%), Year 7 (40%), Year 8 (30%), Year 9 (25%), Year 10 (20%), Year 11 and onwards (15%).xlviii

Inspection fees

New gasoline vehicles pay an annual $20 Smog Abatement Fee for the first six years, after which they get a smog test every two years. Prices for tests are set by private testing stations. New alternative-fuel vehicles, including EVs, pay an annual $8 Smog Abatement Fee for the first six years and do not need tests thereafter.xlix


36

Seattle, WA



(July 2011)

Sales or excise tax

The total sales tax in Seattle was 9.5%, including 6.5% state sales tax and 3.0% local sales taxes.l Motor vehicles were also subject to an additional 0.3% sales tax.li Vehicles powered exclusively by clean alternative fuels, including electricity, were exempt from sales tax.lii

Title fee Titling is conducted at the same time as initial registration. It costs $15 for the certificate of title, $4 for the county filing fee (this is in addition to the normal registration filing fee), and $7 service fee.

EV subsidies EVs were exempt from sales tax (see above)

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee

Annual registration fees include the license tab fee ($30), county filing fee ($2), license service fee ($0.75), service fee ($5), weight-based fee ($10 for vehicles up to 4,000 pounds), Transportation Benefit District Fee ($20 in May 2011, raised to $80 on June 2, 2015), value-based excise taxes (see below), and the EV tax (see below).

Value-based tax

The Regional Transit Authority (RTA) across the Seattle region levies an annual excise tax of 0.3% of the depreciated value of a vehicle. Vehicle value is set by MRSP, depreciated over 13 years: Year 1 (100%), Year 2 (95%), Year 3 (89%), Year 4 (83%), Year 5 (74%), Year 6 (65%), Year 7 (57%), Year 8 (48%), Year 9 (40%), Year 10 (31%), Year 11 (22%), Year 12 (14%), Year 13 and later (10%).liii

Inspection fees

None of the vehicles in this study needed inspections. In 2011, vehicles five years or newer, high-efficiency hybrids (50 miles/gallon in city driving), and electric vehicles were all exempt from emissions inspections. In July 2012, all 2009 and newer cars were permanently exempted from emissions tests.

EV taxes/fees Beginning February 1, 2013, owners of BEVs and PHEVs with a 30-mile range were required to pay an annual $100 fee at registration.liv On July 1, 2016, the fee was raised to $150.

Other taxes/fees Upon initial registration, owners must pay $20 for two license plates. Washington, DC



(July 2011)

Sales or excise tax

The District’s has a 6% sales tax on tangible personal property. However, this did not apply to the retail sale of motor vehicles. Instead, vehicle owners pay an excise tax upon titling their vehicle, set at 6% of fair market value for vehicles 3,499 or less.lv Clean fuel vehicles – including BEVs, PHEVs, and HEVs that get 40 miles per gallon in city driving – are exempt from this tax.

Title fee $26 plus the 6% excise tax (see above)

EV subsidies Clean fuel vehicles are exempted from sales tax (see above). They also receive a discounted first-year registration fee (see below).

Annual taxes/fees

(FY 2011 - FY 2015)

Registration fee $72 per year for passenger vehicles weighing 3,499 pounds or less, which includes all vehicles in this study. Clean fuel vehicles receive a discounted $36 registration in their first year.lvi

Value-based tax N/A

Inspection fees

Emissions tests are required of all vehicles, except zero-emission vehicles such as BEVs. New vehicles automatically get a $10 sticker good for four years. After that, emissions tests are $35 per year.lvii Safety inspections are only required for commercial vehicles.


37

i Gandhi, Natwar M. (2012). “Tax Rates and Tax Burdens in the District of Columbia – A Nationwide Comparison. 2011.” Office of Revenue Analysis, District of Columbia. https://cfo.dc.gov/sites/default/files/dc/sites/ocfo/publication/attachments/Nationwide%20Comparison%202011.pdf Accessed July 9, 2017. ii The current TAVT calculator is available at: https://onlinemvd.dor.ga.gov/tap/welcome.aspx iii Personal communication, Brent Bennett, Director of Motor Vehicles for the DeKalb County Tax Commissioner, June 16, 2016. iv The Georgia Department of Revenue releases an annual ad valorem assessment manual listing these values. Note that after the Title Ad Valorem Tax was (TAVT) introduced in 2013, the annual ad valorem tax became known as the Vehicle Registration Ad Valorem Tax (RAVT). These reports for 2011, 2012, 2013, 2014, and 2015 are available at the following links, all accessed on July 9, 2017: https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2011_RAVT_Manual.pdf; https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2012_RAVT_Manual.pdf, https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2013_RAVT_Manual.pdf https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2014_RAVT_Manual.pdf https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/ADM/Report/2015%20RAVT%20Assessment.pdf v Georgia’s Clean Air Force, “See Frequently Asked Questions,” http://www.cleanairforce.com/motorists/frequently-asked-questions/ Accessed July 8, 2017 vi Gandhi, Natwar M. (2012). Op cite. vii Massachusetts Registry of Motor Vehicles, “Applying for a Registration.” http://www.massrmv.com/Registration/ApplyingforaRegistration.aspx Accessed July 8, 2017. viii Massachusetts Registry of Motor Vehicles, “Fees.” http://www.massrmv.com/Fees.aspx Accessed July 8, 2017. See also: Powers, Martine (March 12, 2014). “Vehicle fee hikes go into effect July 1.” Boston Globe. https://www.bostonglobe.com/metro/2014/03/12/vehicle-registration-fees-increase-inspection-fees-rise-massdot-announces/vVMQhy9xNCm7vLQ1mvqTKJ/story.html Accessed July 8, 2017 ix Massachusetts General Laws, Chapter 60A, §1. https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter60A/Section1 Accessed July 8, 2017. See also: Massachusetts Department of Revenue, “Frequently Asked Questions – Motor Vehicle Excise.” http://www.mass.gov/dor/local-officials/municipal-finance-law/frequently-asked-questions-motor-vehicle-excise.html#q22 Accessed July 8, 2017. x Massachusetts Registry of Motor Vehicles, “Fees.” http://www.massrmv.com/Fees.aspx Accessed July 8, 2017. xi Illinois General Assembly Legislative Research Unit (2011). “Illinois Tax Handbook for Legislators.” http://www.ilga.gov/commission/lru/2011taxhandbook.pdf Accessed July 8, 2017. xii Cook County, Illinois – Code of Ordinances. Chapter 74, Article VI, §230-233. https://library.municode.com/il/cook_county/codes/code_of_ordinances?nodeId=PTIGEOR_CH74TA_ARTVISANEMOVETRTA&searchText Accessed July 8, 2017. xiii Illinois Environmental Protection Agency, “Vehicle Emissions Testing Program.” http://epa.illinois.gov/topics/air-quality/mobile-sources/vehicle-emissions-testing/index Accessed July 8, 2017. xiv This July 2011 tax rate was found through the Ohio Department of Taxation Tax Finder: https://thefinder.tax.ohio.gov/StreamlineSalesTaxWeb/AddressLookup/LookupByAddress.aspx?taxType=Sales Accessed July 8, 2017 xv County Commissioners Association of Ohio (2011). Handbook, Ohio County Commissioners. Chapter 17: County Permissive Taxes. https://www.ccao.org/userfiles/hdbkchap017-2011.pdf Accessed July 8, 2017 xvi Ohio Environmental Protection Agency, “Welcome to the Ohio E-Check Homepage.” http://www.epa.ohio.gov/dapc/mobile.aspx#133707855-frequently-asked-questions Accessed July 8, 2017 xvii Personal communication, Stephanie Cook, Assistant Chief, Tax Distribution Division, Ohio Department of Public Safety, July 10, 2017. Current permissive tax rates are found at the Ohio Department of Public Safety website, http://www.publicsafety.ohio.gov/links/Taxing-District-Code-Book.pdf Accessed July 8, 2017. xviii Texas Comptroller of Public Accounts (2011). “Motor Vehicle Tax Guidebook, 2011.” http://comptroller.texas.gov/taxes/publications/96-254.pdf Accessed July 8, 2017 xix ibid. xx Texas A&M Transportation Institute (2015). “Estimating the Cost to Process Vehicle Registration and Title

38

Transactions in Texas Counties.” http://www.txdmv.gov/txdmv-forms/doc_download/5121-estimating-the-cost-to-process-vehicle-registration-and-title-transactions-in-texas-counties&usg=AFQjCNEv7645scMAffMllkb_y_giPYJ8fQ&cad=rja Accessed July 8, 2011 xxi Texas Department of Public Safety, “Cost of Inspection.” https://www.dps.texas.gov/RSD/VI/CostOfInsp.htm Accessed July 8, 2017 xxii McCrimmon, Ryan (2015). “Car Sticker Rules Starting Sunday Could Confuse Drivers.” The Texas Tribune. https://www.texastribune.org/2015/02/27/single-sticker-car-registration-could-bring/ Accessed July 8, 2017 xxiii Hamilton, William E. (2010). Memorandum to Interested Parties regarding the Transportation Administration Collection Fund. House Fiscal Agency. http://www.house.michigan.gov/hfa/Archives/PDF/TACFHistory.pdf Accessed July 8, 2017. xxiv For a clear discussion of the complexities of Michigan’s ad valorem tax, including this time aspect, see: Hamilton, William E. (2014). “Vehicle Registration Primer.” House Fiscal Agency. http://www.house.michigan.gov/hfa/PDF/Alpha/Vehicle_Registration_Primer_Aug2014.pdf Accessed July 8, 2017 xxv ibid. xxvi Texas Comptroller of Public Accounts (2011). “Motor Vehicle Tax Guidebook, 2011.” http://comptroller.texas.gov/taxes/publications/96-254.pdf Accessed July 8, 2017 xxvii ibid. xxviii Texas A&M Transportation Institute (2015). “Estimating the Cost to Process Vehicle Registration and Title Transactions in Texas Counties.” http://www.txdmv.gov/txdmv-forms/doc_download/5121-estimating-the-cost-to-process-vehicle-registration-and-title-transactions-in-texas-counties&usg=AFQjCNEv7645scMAffMllkb_y_giPYJ8fQ&cad=rja Accessed July 8, 2011 xxix Texas Department of Public Safety, “Cost of Inspection.” https://www.dps.texas.gov/RSD/VI/CostOfInsp.htm Accessed July 8, 2017 xxx McCrimmon, Ryan (2015). “Car Sticker Rules Starting Sunday Could Confuse Drivers.” The Texas Tribune. https://www.texastribune.org/2015/02/27/single-sticker-car-registration-could-bring/ Accessed July 8, 2017 xxxi California State Board of Equalization (2011). “Special Notice: California Statewide Sales and Use Tax Rate to Decrease by 1% on July 1, 2011.” http://www.boe.ca.gov/news/pdf/l277.pdf Accessed July 9, 2017 xxxii California State Board of Equalization (2011). “California City and County Sales and Use Tax Rates, Rates Effective 7/1/2011 through 9/20/2011.” https://www.boe.ca.gov/sutax/pdf/Archive_Rates-07-11.pdf Accessed July 9, 2017 xxxiii California Department of Motor Vehicles (2014). “Reflectorized License Plate Fee.” Vehicle Industry News 2014-28. https://www.dmv.ca.gov/portal/wcm/connect/561747ce-be6e-4a22-ae3c-a537f02e5fdf/14vin28.pdf?MOD=AJPERES Accessed July 9, 2017 xxxiv California Department of Motor Vehicles (2017). “County Fees – Appendix 1A.” https://www.dmv.ca.gov/portal/wcm/connect/1fb30000-7882-44ee-a3a6-2855d9635cac/app1a_county_and_city.pdf?MOD=AJPERES Accessed July 9, 2017 xxxv Legislative Analyst’s Office (1998). “A Primer on the Vehicle License Fee.” http://www.lao.ca.gov/1998/061798_vlf_primer/061798_vlf.html Accessed July 9, 2017; California Department of Motor Vehicles . “Vehicle Industry Registration Procedures Manual.” xxxvi California Department of Motor Vehicles, “Smog Information.” https://www.dmv.ca.gov/portal/dmv/detail/vr/smogfaq Accessed July 9, 2017; California Department of Motor Vehicles, “Registration Related Fees.” https://www.dmv.ca.gov/portal/dmv/detail/pubs/brochures/fast_facts/ffvr34 Accessed July 9, 2017 xxxvii Florida Department of Revenue (2015). “Discretionary Sales Surtax Information for Calendar Year 2015.” http://floridarevenue.com/Forms_library/current/dr15dss.pdf Accessed July 9, 2014. xxxviii An estimate of current fees is found at: Florida Department of Highway Safety and Motor Vehicles, “Sample Registration Fee Calculations.” http://www.flhsmv.gov/feeSamples.htm Accessed July 9, 2017. We estimated that statutory fees and service charges were $13.55 higher before the tax reduction on September 1, 2014 based on newspaper articles: Tracy, Dan. (August 28, 2014). “Tax collectors hold onto checks until tag-renewal fees drop Sept. 1.” Orlando Sentinel. http://www.orlandosentinel.com/news/politics/os-tag-renewal-reduction-20140828-story.html Accessed July 9, 2017; Berman, Dave. (August 22, 2014). “Vehicle registration fees to drop between $13-25 a year.” Florida Today. http://www.floridatoday.com/story/news/local/2014/08/22/vehicle-registration-fees-drop-year/14439549/ Accessed July 9, 2017

39

xxxix Gandhi, Natwar M. (2012). Op cite. xl New York State Department of Motor Vehicles, “Passenger Vehicle Registration Fees, Use Taxes, and Supplemental Fees.” https://dmv.ny.gov/registration/registration-fees-use-taxes-and-supplemental-fees-passenger-vehicles Accessed July 9, 2017 xli Pennsylvania Department of Revenue. “Act 48 of 2009.” Tax Law Policy Bulletin. http://www.revenue.pa.gov/GeneralTaxInformation/TaxLawPoliciesBulletinsNotices/Documents/State%20Tax%20Summary/2009_tax_summary.pdf Accessed July 9, 2017 xlii Pennsylvania Department of Environmental Protection. (2012). “Alternative Fuels Incentive Grant Program: Report to the Pennsylvania Legislature.” http://www.elibrary.dep.state.pa.us/dsweb/Get/Document-89169/0340-RE-DEP4371%20%20AFIG%20Program%20Report%20to%20the%20PA%20Legislature%202010%20Annual%20Report.pdf Accessed July 9, 2017 xliii These fees were documented over time in 2011 and 2015 reports from the Idaho Transportation Department Economics and Research Section, entitled “State-by-State Comparison of Annual Motor Vehicle Registration Fees and Fuel Taxes.” The 2011 report is no longer posted on their website, but the 2015 report is available at: http://apps.itd.idaho.gov/apps/Fund/Compar_Annual_Veh_Operat_2015.pdf Accessed July 9, 2017 xliv These estimates are based on online forum discussions on vehicle inspection costs in Philadelphia. For example, see the following 2011 discussion: http://www.city-data.com/forum/philadelphia/1293981-pa-auto-emissions-safety-inspection-costs.html Accessed July 9, 2017 xlv California State Board of Equalization (2011). “Special Notice: California Statewide Sales and Use Tax Rate to Decrease by 1% on July 1, 2011.” http://www.boe.ca.gov/news/pdf/l277.pdf Accessed July 9, 2017 xlvi California State Board of Equalization (2011). “California City and County Sales and Use Tax Rates, Rates Effective 7/1/2011 through 9/20/2011.” https://www.boe.ca.gov/sutax/pdf/Archive_Rates-07-11.pdf Accessed July 9, 2017 xlvii California Department of Motor Vehicles (2017). “County Fees – Appendix 1A.” https://www.dmv.ca.gov/portal/wcm/connect/1fb30000-7882-44ee-a3a6-2855d9635cac/app1a_county_and_city.pdf?MOD=AJPERES Accessed July 9, 2017 xlviii Legislative Analyst’s Office (1998). “A Primer on the Vehicle License Fee.” http://www.lao.ca.gov/1998/061798_vlf_primer/061798_vlf.html Accessed July 9, 2017; California Department of Motor Vehicles . “Vehicle Industry Registration Procedures Manual.” xlix California Department of Motor Vehicles, “Smog Information.” https://www.dmv.ca.gov/portal/dmv/detail/vr/smogfaq Accessed July 9, 2017; California Department of Motor Vehicles, “Registration Related Fees.” https://www.dmv.ca.gov/portal/dmv/detail/pubs/brochures/fast_facts/ffvr34 Accessed July 9, 2017 l Washington State Department of Revenue, “Local Sales/Use Tax Changes (Effective July 1, 2011).” http://dor.wa.gov/Docs/forms/ExcsTx/LocSalUseTx/LocalSlsUseFlyer_11_Q3.pdf Accessed July 9, 2017 li Washington State Department of Revenue, “Motor vehicle sales/use tax.” http://dor.wa.gov/content/FindTaxesAndRates/OtherTaxes/tax_motorvehicle.aspx Accessed July 9, 2017 lii Washington State Legislature, “RCW 82.08.809. Exemptions—Vehicles using clean alternative fuels and electric vehicles.” http://apps.leg.wa.gov/rcw/default.aspx?cite=82.08.809 Accessed July 9, 2017 liii Personal communication, Lori Bevier, Senior Compliance Analyst for Sound Transit, August 23, 2016. liv Washington State Legislature, “RCW 46.17.323. Electric vehicle registration renewal fees.” http://app.leg.wa.gov/rcw/default.aspx?cite=46.17.323 Accessed July 9, 2017 lv Gandhi, Natwar M. (2012). Op cite; Current rates available at: District of Columbia, “Vehicle Title Fees.” https://dmv.dc.gov/book/vehicle-fees/vehicle-title Accessed July 7, 2017. lvi Historical registration fees available in Current fees are available at: District of Columbia Department of Motor Vehicles, “Vehicle Registration Fees.” https://dmv.dc.gov/node/155452 Accessed July 9, 2017 lvii District of Columbia Department of Motor Vehicles, “Vehicle Inspection Fees.” https://dmv.dc.gov/book/vehicle-fees/vehicle-inspection Accessed July 9, 2017