Are electric vehicle users willing to pay tax for charging electric vehicles? A case study of South Korea

With the increasing penetration of electric vehicles (EVs), tax revenue loss due to decreasing fuel tax has become problematic. This study investigated the application of taxing EV charging costs for securing EV tax revenue. The acceptable EV charging tax was estimated from the perspective of Korean consumers (1177 respondents) and the influencing demographic variables thereof were identified using the contingent valuation method. Among them, income was found to be the most significant factor in willingness-to-pay for EV charging tax. Tax revenues for each scenario up to 2050 were forecasted. The estimated willingness-to-pay for charging tax was 22 KRW/km (0.02 USD/km) for a 60 kWh-EV with a charging cost of 15,000 KRW (13.1 USD). The forecasted tax revenues for Scenarios 1 (excluding tax) and 2 (including tax) were 2,167,500 and 5,324,280 million KRW, respectively (1894 and 4652 million USD, respectively) in 2050, representing decreases of 82.2% and 56.8%, respectively, compared to that in 2022. Scenario 2's decrease was less than Scenario 1's owing to the secured EV tax revenue. To achieve the same amount in both 2050 and 2022, tax revenue should be adjusted to 48 KRW/km (0.04 USD/km). The findings highlight the importance of taxing charging costs and provide directions for a tax system by analyzing the factors affecting the willingness-to-pay, which can contribute to establishing feasible EV-related policies and decision-making.