Road Usage Charging United States Report
How will the United States fund roads in the future?
The motor fuel tax is no longer an effective road funding model. Existing infrastructure funding gaps can only widen with the rise of electric vehicle sales. In 2022 EV sales are likely to surpass 5% of total new vehicle sales. By 2030, if the US hits its target, EVs will make up more than 50% of vehicle sales. For each EV sold, the government (state and federal) will lose $3,000 in motor fuel tax revenues over the vehicle’s life. Hitting its EV 2030 sales target implies that the government will lose over $20 billion in revenues in that year alone!
The solution, Road Usage Charging (RUC), is already here
Road Usage Charging is no longer just a theory, it is quickly becoming a viable funding source and an opportunity to:
- Raise funds from electric and other fuel efficient vehicles for the public sector
- Develop new competencies and reach new customers for the private sector
RUC is a dynamic market. In the 5 months it took to develop this report, there have been multiple major developments in the US RUC market:
- New legislation enabling road usage fees was enacted: In June, Louisiana signed into law Act 578 enabling the state to begin collected road usage fees from electric and hybrid vehicles
- A third permanent RUC program was launched: In July, Virginia launched a voluntary RUC program that already has over 5,000 participants
- A tender was completed for RUC account managers: Oregon completed RUC tenders for a new ODOT Account Manager and for new Commercial Account Managers
- A RFP for a RUC pilot was solicited: In November, Oklahoma launched a tender for RUC project manager services
- The state of Washington is planning to establish a permanent RUC program in early 2023
- A national RUC pilot is under preparation
RUC has immense potential but successful implementation requires a deep knowledge of the market paired with a well-prepared strategy
This is exactly why PTOLEMUS has developed the RUC USA Report, to support understanding and strategy implementation of RUC at a moment when it is critically needed.
With the right strategy & engagement, RUC will succeed! To scale, RUC needs simple, cost effective solutions, and thanks to connected vehicle technologies, these now exist. In-vehicle telematics using GPS and 4G/5G has the potential to provide a frictionless user experience at a cost below 5% of revenues (the “holy grail”).
For this future to happen, RUC is also dependent on the engagement of key public and private stakeholders including OEMs and larger technology groups; engagement which is beginning to pick-up. At least one state is preparing a RUC pilot with an OEM partner currently. Discussions with all current managers of connected vehicle services (insurers, fleet managers, etc.) should start immediately. It is through this combination of scalable, cost effective technology and broader ecosystem engagement that RUC will become a worthy successor to the motor fuel tax.
The Road Usage Charging United States Report answers the following questions:
The first RUC diagnostics and simulation tool for road & transport decision makers, the RUC USA Report is a 330-page in-depth analysis of the current and future road financing in the US.
The report includes:
- An examination of the economic, financial, political and technological context behind RUC
- A detailed assessment of RUC vs. other major funding solutions across 9 key dimensions
- The status of road funding examined in numerous states including 4 in-depth profiles of US States that are at the forefront of RUC initiatives
- A comparison of RUC in the US and distance-based charging in Europe that identifies 5 key lessons and insights that the US can take away from the European experience
- Models for the US and Colorado covering:
- Motor fuel tax revenues forecast
- RUC fees & revenues scenario
- RUC costs scenario
- The 2022-2040 Excel forecast model has been developed bottom up
- With inputs from over 20 reputable sources and PTOLEMUS’ own automotive and EV forecasts
- To easily store and simulate hundreds of unique vehicle, travel, and pricing scenarios as defined by the user
- Additional forecasts, scenarios, and slides on the other 49 states (+DC) can also be purchased*
- Quantitative and qualitative analysis on which states would benefit the most from a RUC scheme