LS Attorney Shalloway – Spring 2023 – MJEAL

Shalloway – Spring 2023 – MJEAL

The Role of Electric Vehicles in Michigan

Eric A. Shalloway

In the state of Michigan, gas taxes contribute funds to improve roads and infrastructure, but between 2019-2021 it is estimated that there was a $50 million decrease in revenue due to electric vehicle owners not paying the tax.[1] The Michigan County Road Association explained that approximately 840 miles of roads would not be resurfaced annually, due to the loss of revenue.[2] Motor vehicles[3] have a role in the Michigan economy, and new electric vehicle manufacturing sites are increasing in the state.[4] The gas tax is increasing from 27.2 cents per gallon to 28.6 cents per gallon, making Michigan the sixth highest gas tax state in America.[5]

There can be significant benefits from driving an electric vehicle such as cleaner air, improved air quality, possible tax credits or economic savings, and fewer greenhouse gas emissions.[6] However, electric vehicle expenses can be a burden to lower consumers’ income, and tackling clean air policies in both rural and urban settings is challenging.[7] For example, electric car registration in Michigan is around $140, but paid owners are not required to pay the required gas tax for fuel.[8] Since this left a gap in revenue for the state government, Governor Gretchen Whitmer has expressed interest in working with the state legislature to reach a solution.[9]

The Congressional Research Service found that in 2018, over 361,000 plug-in electric vehicles and more than 341,000 hybrid electric vehicles were purchased in the United States.[10] Next, in 2020, electric vehicles account for only about 2 percent of all automobiles, but with approximately 256 million people on the roads, the numbers are expected to increase to over 20 percent in the next decade.[11] There is a large environmental difference between electric vehicles and gasoline powered cars. By comparison, an all-electric Chevrolet may produce 189 grams of carbon dioxide per average mile, but a gasoline dependent Toyota Camry or Ford F-150 may create 385 and 636 grams of carbon dioxide driven each mile respectively.[12] As local, state, and federal support increases for charging stations, the marketplace will expand.[13]

There are supportive policies in place for electric vehicles, but more can be done “on the infrastructure side” for “range anxiety.”[14] The Infrastructure Investment and Jobs Act[15] will prioritize building charging stations across the nations, and specifically, Michigan received over $16 million for the National Electric Vehicle Infrastructure (“NEVI”) Formula Program in fiscal year 2022.[16] Last year, Governor Gretchen Whitmer’s proposed spending $6.3 billion to improve infrastructure in roads, bridges, airports, and highways.[17]

The Michigan Motor Fuel Tax Act of 2000 outlines that after January 1, 2022 the gas tax rate will increase with the inflation rate and announced thirty days in advance of a price increase.[18] As specified in the Michigan Constitution, 90 percent or more of a specific tax on fuel will be directed towards “the transportation purposes of planning, administering, constructing, reconstructing, financing, and maintaining state, county, city, and village roads, streets, and bridges designed primarily for the use of motor vehicles using tires.”[19] There is also a limit that no more than 25 percent of the general sales taxes will be used for “transportation purposes.”[20] The Michigan Supreme Court decided that the state’s general sales taxes “are not constitutionally dedicated funds” to transportation and the statutory language is clearly stated.[21] Now, Michigan road interest groups are calling on state lawmakers to protect the roads from deterioration.[22] A recent study predicted that if this trend continued, Michigan could lose $95 million in annual gas tax revenue.[23]

The County Road Association of Michigan worked with the Anderson Economic Group to study state funding of roads and infrastructure.[24] There was a 75 percent increase in electric vehicles purchased in Michigan to 29,590 from 2020-2021.[25] This led to an increase in the number of total electric vehicles in the state, with 162,739 electric vehicles in Michigan by October of 2021.[26] Over the fiscal year of 2022, the majority of income for the state arose from federal and state motor fuel taxes, income taxes, vehicle registration fees, and marijuana tax.[27] In a large midwestern state, there are many options for new streams of commerce. Policy solutions to combat the loss of revenue from electric vehicle users could be tolling, annual flat registration fees, miles at registration fees, per kilowatt-hour fees or mileage-based user fees.[28]

Balancing state funding for improving infrastructure while emphasizing electric vehicle use is a difficult legal and policy problem. If a new statute places too heavy a burden with high fees on electric vehicle drivers, there will be less incentive to be environmentally friendly. instead, if a significant economic plan is not enforced by the state government, the road conditions will worsen, and everyone will suffer the consequences. Thus, lawmakers in Michigan should make their intentions clear and form a fiscal and environmental application that is equitable to the citizens. It is understandable to want automobile drivers to pay their fair share, but the incentives need to continue to drive electric vehicles. Finally, the environmental stakes are too high, and the research shows these divergent strategies should come together for the common good of the state of Michigan and larger country.

Eric Shalloway is a Junior Editor with MJEAL. Eric can be reached at [email protected].

[1] RoseWhite, Electric vehicles could put a $95M hole in Michigan’s road budgetMLIVE (Jan. 17, 2023, 3:51 PM), -road-budget. html.

[2] Scubic Team, State road groups want electric vehicle owners to make up for lost revenue from gas tax, FOX 2 DETROIT (January 17, 2023), gas-tax.

[3] MICH. comp. LAWS ANN. § 257.33 (West 2018).

[5] Taylor DesOrmeau, Michigan’s gas tax will increase in 2023, MLIVE (Dec. 2, 2022, 4:50 PM),

[7] id. at 361-64.

[9] id.


[11] Matthew N. Metz & Janelle London, State Vehicle Electrification Mandates and Federal Preemption, 9 Mich. J. Env’t. & Admin. L. 433, 441-42 (2020).

[13] Nathan Reck, Electric Vehicles, Infrastructure Electrification and the Urban-Rural Divide, 23 Sci High School. & Tech. L. Rev. 77, 87-88 (2020).

[18] MICH. comp. LAWS ANN. § 207.1008 (LexisNexis 2018).

[19] MI. CONST. art. 9, § 9.

[20] id.

[21] County Road Association of Michigan v. governors705 NW2d 680, 682-83 (Mich. 2005).

[23] id.

[24] ANDERSON ECON. GRP., Infrastructure Funding: The Impact of EVs on Michigan Roads (Jan. 17, 2023),


[26] id.

[27] id. at 10.

[28] id. at 31; supra note 24.