As more and more people switch to driving electric vehicles, state revenue from taxes on petrol and diesel will fall dramatically. So how will the German government continue to pay for building and maintaining roads and autobahns? One research institute has proposed a possible solution: a distance-related toll on all roads, calculated using satellite data. 

Switch to electric vehicles means fewer taxes for government

With the green revolution occupying a lot of political thought in Germany, there is one factor that has so far received little attention: if all cars are one day electric, where would the money for building and maintaining roads come from? Rather than vehicle taxes, the driving infrastructure in Germany is currently primarily financed through the taxation of petrol and diesel. 

According to the research institute Agora Verkehrswende, based in Berlin, by 2030 mineral oil tax revenue from passenger cars will fall by almost half compared to 2020 - a loss of around 13 billion euros per year. Even if revenue from taxation on electricity increases, there will still be a huge shortfall. 

Distance-related road toll could make up revenue

Together with the research institute Infras, based in Switzerland, Agora has formulated a possible solution: a distance-related toll on all roads could, the institutes argue, compensate for the loss in revenue and at the same time accelerate a turnaround in transportation, by encouraging people to switch from their cars to public transportation. 

The system would work by using satellite positioning and mobile phones to measure how far people travel in their cars. They would then be billed for their journeys by a private service provider. The researchers have proposed an average toll of 5,4 cents per kilometre from 2025. 

Prices would also be adjusted for different types of vehicles - with smaller, lighter vehicles given accordingly cheaper rates - and for different times of day, for instance by making it more expensive to drive during rush hour, to encourage more people to use public transport on their way to work. 

Money could be invested in German infrastructure

Altogether, Agora estimates the scheme could bring in revenue of around 33 billion euros in 2030. A good half of this, the institute said, could be used “for the common good”, to invest in infrastructure for public transport, pedestrians and cyclists, and noise reduction. 

The general principle behind the idea is, “Those who drive more and thus use the roads more and impose costs on the general public, also pay more,” said Agora director Christian Hochfeld, who argued that the system is far, strengthens climate protection and could develop “into a digitisation and modernisation project with the potential to be an international role model.”