Gaurav Batra , Global Advanced Manufacturing & Mobility Analyst
Leader , EY
GOVERNMENTS EXPLORING ALTERNATIVES Given this context , a critical question emerges : how will governments make up for the shortfall when they can no longer depend on fuel taxes to fund their budgets ? As Julie Lorenz , former Kansas Secretary of Transportation , puts it : “ The future of transportation funding lies in finding a sustainable model that reflects how people use our roads . Road usage charges represent a promising alternative , but there ’ s much work to ensure they are fair and practical for all drivers .”
Governments worldwide are discussing and analysing the impending tax deficit from the shift to EVs . The OBR in the UK has pointed out that efforts to combat climate change by moving away from fossil fuels are “ rapidly eroding ” tax revenues from petrol and diesel vehicles . While governments recognise the challenge , there is still uncertainty about the best approach to address the growing tax deficit . The transition to EVs presents a complex issue that requires balancing environmental goals with fiscal sustainability .
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