The California Transportation Commission (CTC) has raised concerns about a significant projected loss in transportation funding due to the increasing adoption of zero-emission vehicles (ZEVs) and enhanced fuel efficiency standards. During the Road Charge Technical Advisory Committee Meeting on February 28, 2025, officials estimated that California could face a staggering $31.3 billion shortfall in fuel excise tax revenue over the next decade. This decline is attributed to the state's mandate to cease the sale of new internal combustion engine vehicles by 2035, alongside the growing popularity of fuel-efficient and electric vehicles.

The CTC highlighted that as more consumers shift towards ZEVs, fuel tax revenues will diminish, impacting the funding available for essential transportation projects. This trend is compounded by anticipated reductions in federal gas tax receipts, which could see a loss of approximately $25 billion by 2035, further straining the Highway Trust Fund.

Despite these challenges, the CTC remains optimistic about consumer interest in ZEVs. Focus group studies indicated that Californians are eager for more fuel-efficient and zero-emission options, independent of state or federal mandates. Additionally, projections suggest that by the 2027-2028 model years, the cost of electric vehicles may equal or even undercut that of traditional vehicles, potentially accelerating their adoption.

In light of these developments, the CTC plans to initiate a legislative and public education campaign to address the funding gap and promote awareness of the transition to cleaner transportation options. As California navigates this shift, the implications for transportation funding and infrastructure will be critical to monitor in the coming years.