What’s Happening

There is no debate that we need to replenish the Transportation Trust Fund, that $2 billion annual bucket of money – separate from the general fund — that is used to rebuild New Jersey’s infrastructure. Without it, roads sag, bridges crumble, trains stop, and the economy seizes up. The only dispute is how you fund the TTF, which we haven’t had to decide since 2016.

We also agree that it should be funded largely by gas tax – currently set at 42.3 cents per gallon – but this time, the Legislature has decided that a chunk of the money should come from drivers of vehicles that don’t use gas at all. Pause here for cognitive dissonance.

That’s not to say electric vehicle owners shouldn’t chip in something to keep our roads in shape, but our lawmakers plan to tag EVs with a $1,000 fee when they’re registered – technically, $250-290 per year, but since they don’t pay at the pump, the fee for a new EV registration, which is for four years, would be paid up front.

So when you combine that with the fact that the enormously popular state sales tax exemption for EVs will be phased out in the next three years – which means you’d no longer save $2,500 on a $38,000 EV — you have to ask this question about the double-whammy facing drivers of these vehicles: Why would Gov. Phil Murphy kneecap his own efforts to encourage the sales of electric cars?

Those two costly factors blunt the momentum. In fact, when you consider that EV sales haven’t exactly been robust in the first place, it feels like a surrender of the governor’s ambitious climate goals.

Murphy won’t discuss specifics until the new TTF bill reaches his desk — which could happen as early as tomorrow – and there are no clues in his budget about what the sales tax exemption phase-out looks like, which leads policy experts to conclude that he is either hiding the football or still hasn’t figured out the details.

But everyone can agree on this much: Only 12% of all new car sales in New Jersey were zero-emission vehicles last year, and if Murphy is still committed having every new car sold in the state to be electric or plug-in hybrid in 2035, he is very likely to fall pitifully short of that goal if he chooses to punish EV drivers today.

If Murphy is in earnest, his choice is simple, according to Jim Appleton, the president of the NJ Coalition of Automotive Retailers: “There is only one tried and true strategy for increasing sales of unpopular vehicles: Incentives,” Appleton said. “For 120 years, dealers and car makers have used cash-on-the-hood incentives and discounted financing to move low-demand inventory.”

And slamming EV drivers with a registration fee while slashing consumer incentives is, to use Appleton’s term, “a head-scratcher. . . . that will slow our roll to an EV future, and it places the administration’s budget priorities squarely at odds with its climate change policies,” he said. “The shrinking of EV incentives will render the governor’s goal of 100% by 2035 literally unachievable.”

Doug O’Malley of Environment New Jersey put it this way: “Gov. Murphy showed true leadership by having New Jersey adopt the Clean Cars (emissions) standards last year. But rolling back the sales tax exemption and adding an EV tax send a schizophrenic message to potential EV drivers.”

In fact, according to Pam Frank of ChargEVC, the policies under consideration will put New Jersey on a path to be “No. 1 in terms of punitive levels for EV drivers – taking the place of Alabama.” Indeed, while the driver of our state’s most popular gas-powered car (Honda CR-V) will pay $127 per year, drivers of electrics will pay $1,000 up front for four.

This is no time to punish drivers of electrics, this is time to encourage and subsidize them – “not forever,” as Dave Pringle of Empower New Jersey told the Assembly Transportation Committee, “but to ease an orderly transition.”

To comply with the regulations Murphy imposed last year, New Jersey was supposed to have 23.5% of new cars sales to be electric or plug-in hybrid by now, and 43% by 2027. At this pace, his vision of an electric transportation future is quixotic. The effort to turbocharge EV sales and invest in charging infrastructure must find another gear.

As of last June, only 1.8% of cars registered in New Jersey are electric, which means we have to start calling this what it is: another failed Murphy commitment, one that can be measured in simple but grim arithmetic.