India’s EV transition: managing fuel tax revenue loss

This issue brief explores solutions for managing the fuel tax revenue loss from the electric vehicle (EV) transition in India, without impeding the EV transition. It estimates fuel tax revenue losses and evaluates alternative taxation options for governments to recover these losses. The brief recommends a distance tax regime mileage-based user fees (MBUF))or road user charges (RUCs); distance taxes are per kilometre rates, charged according to utilisation. Brief analyses the impact of the distance pricing on road user costs. It also evaluates alternative technology options for measuring and charging distance tax to suggest global navigation satellite system (GNSS)-based distance tax as the sustainable alternative to fuel tax. Finally, the brief make recommendations to pilot GNSS technology and road pricing regimes in urban areas; and prepare policy to guide pricing and build public acceptability.