The growing share of electric vehicles and the expected increase in EV sales this year amid soaring gasoline prices are reducing the revenues for the U.S. Highway Trust Fund, which pays for America’s roads.

Most of the revenue for the fund comes from the 18.4% per gallon federal gas tax, which hasn’t been changed since 1993.

Yet, over the past 30 years, the funding for the trust fund has been declining, due to inflation and the fact that EVs now represent 2.5% of total light-duty vehicles in operation in America, and the market share of internal combustion engine vehicles has dropped by 24 percentage points since 2016.

The new oil crisis and U.S. national average gasoline price topping $4 per gallon could prompt more potential buyers to look to purchase an EV—whose owners, obviously, don’t pay the federal gas tax.

More EVs means lower revenues for the Highway Trust Fund, which is teetering on bankruptcy every year and needs to be regularly backfilled by Congress. Therefore, the current oil crisis “shows why it’s time to dump the gas tax,” John Bozzella, president and CEO of Alliance for Automotive Innovation, said this week.

The auto industry trade association, which represents most U.S. and foreign automakers in America, proposes to scrap the federal gas tax and replace it with a single fee on every vehicle based on weight.

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“This policy would guarantee every vehicle on the road contributes something to maintaining America’s transportation network,” Bozzella wrote in a blog post this week.

“We can drive with the devil we know… or get behind a new policy that requires every vehicle on the road to contribute to the upkeep of America’s roads and bridges.”

The auto industry group’s latest analysis of U.S. EV data showed at the end of March that a total of 164 electric models are now available for sale in the U.S. Although EV sales fell last year from 2024, electric vehicles represented 9.6% of new U.S. light-duty vehicle sales for full-year 2025.

EVs now account for 2.5% of total light-duty vehicles in operation in the United States, while the market share of internal combustion engine vehicles, whose owners pay the federal gas tax, has decreased by 24 percentage points since 2016.

In January 2026, hybrids were 19% of all light-duty vehicle sales, the Alliance’s CEO Bozzella said.

As gasoline prices spike due to the war in the Middle East, the U.S. might see an additional shift in the marketplace toward EVs and hybrids, the industry group said.

“Online searches for EVs are up 20 percent since the conflict began,” Bozzella wrote.

The Alliance for Automotive Innovation argues that a single, weight-based vehicle fee can fully fund the Highway Trust Fund, unlike the gas tax.

For over 20 years, transportation spending has exceeded the dedicated revenue flowing into the trust fund as the gas tax has failed to keep pace with inflation, and vehicles are becoming more fuel-efficient, the Committee for a Responsible Federal Budget says. It estimates that the Highway Trust Fund would be insolvent by 2028.

Since increasing the federal gas tax is a nonstarter in any Congress, the solution to fix the problem with the dwindling revenues for the Highway Trust Fund is to replace it with a fee for every vehicle using the road, regardless of how it’s powered/fueled, the Alliance for Automotive Innovation says.

Bozzella notes that the proposed weight-based vehicle fee is simple, and nobody would need to track how many miles you drive, like some proposals out there, to determine what you pay.

“Beyond that, it’s an overdue policy change that insulates infrastructure spending – a $3.5 trillion national need over the next decade – from gas price shocks and inevitable geopolitical disruptions,” Bozzella noted.

By Tsvetana Paraskova for Oilprice.com

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