Car Travel May Be Cheaper in the Future Except in Cities, According to Experts

Experts from Linköping University in Sweden have conducted a new study that suggests a potential shift in the cost dynamics of car travel in the future.

The research outlines that as the current trend of electric vehicles (EVs) continues, car travel costs might become cheaper for rural residents while increasing for city dwellers due to congestion-related challenges.

Cheaper to Travel by Car

Maria Börjesson, an adjunct professor at Linköping University's Department of Management and Engineering and a professor at the Swedish National Road and Transport Research Institute, said: "In 2040, it may be cheaper to travel by car if you live in the countryside, but in the city it might even be more expensive."

The current tax system heavily depends on fuel taxes, a significant government revenue source. However, with the rise of EVs and fuel-efficient cars, this reliance could be disrupted, creating a fiscal gap.

Some countries are considering mileage-based taxes to counter this decline. Börjesson criticized this approach due to monitoring costs and changing carbon relevance.

In response, the experts suggested a congestion-focused tax solution. They argued that all vehicles, regardless of their power source, cause congestion at specific times and places. To address potential EV-related congestion in urban areas, the researchers propose a congestion tax to manage this issue.

To determine the magnitude and scope of such a tax, the team conducted an extensive simulation of traffic scenarios around Stockholm in the year 2040. This simulation accounted for the prevalence of electric cars across an area encompassing both rural and urban segments.

The simulation demonstrated that congestion remains a peak-time concern around specific nodes such as Stockholm and Uppsala, and this might intensify as EV adoption grows.

To counteract this, the researchers suggested that imposing congestion taxes on a broader range of routes and during peak hours could help balance traffic flow.

Compared to today's traffic landscape, where Stockholm's inner city charges nearly €4 ($4.39) during peak traffic, the study anticipated a potential doubling of this charge during future rush hours.

Börjesson commented on the efficacy of such congestion charges, saying, "It may be most effective to have really high congestion tax during the worst hours, but significantly lower at other times."

Non-Congestion-Related Expenses

The researchers' findings also highlighted the importance of considering non-congestion-related expenses like accidents and wear and tear. A slight increase in vehicle taxes might be appropriate to address these costs.

According to the analysis, this dual approach of congestion taxes and higher vehicle taxes could cover the various costs associated with road traffic, striking a balance between the fiscal requirements and the impacts of traffic congestion.

Nonetheless, the study acknowledged that uncertainties lie within its simulations, including factors like economic growth, population shifts, and future car purchasing costs.

There's also the potential challenge of addressing fairness, particularly in urban areas where residents may object to disproportionately covering road system costs.

Börjesson acknowledged this potential concern, noting that the fairness perspective hinges on individual viewpoints and is subject to political deliberation.

The team's findings were published in Transport Policy and provided by The Swedish Research Council.