China has a new electric car problem: a drastic decision is coming

China faces a new challenge with its electric vehicles: A drastic decision is being considered The growing size and weight of electric cars are increasingly straining road infrastructure, while the government struggles to secure enough funding for maintenance due to declining sales of gasoline and diesel vehicles. As a result, officials are exploring new ways to finance roads, including mileage-based tolling, which would require electric vehicle owners to contribute more directly to infrastructure costs, independent of their fuel tax exemption. Electric vehicles are becoming larger and heavier According to data from China's Association of Automobile Manufacturers, nearly 60 percent of models introduced in the first half of 2026 were longer than five meters. Many manufacturers are shifting toward large SUVs and minivans, aiming to attract customers seeking space and luxury. Some of these vehicles weigh almost three tons, with large batteries, complex electric powertrains, and premium features increasing their mass and the load they place on roads. Conversely, only two percent of new models were shorter than 4.5 meters. This proportion was just 13 percent a year earlier, highlighting how quickly the Chinese market is moving away from smaller, lighter vehicles. Less fuel means less money for roads Traditionally, maintenance of much of China’s highway network has been funded through revenue from fuel taxes. However, since electric vehicles do not consume fuel, their owners do not contribute to this system in the same way as drivers of conventional vehicles. As the number of electric and plug-in hybrid vehicles grows, income from fuel taxes is steadily decreasing. At the same time, the need to maintain an ever-expanding highway network used by heavier vehicles increases. Estimates suggest that China is missing roughly half the required funds annually for regular maintenance and management of highways. About 40 percent of local highways planned for repair lack secured funding. The annual financial shortfall could reach 300 billion yuan, approximately 36 billion euros. A potential solution under consideration is mileage-based tolling One possible approach being discussed is introducing a toll based on distance traveled. Unlike fuel taxes, such a system would apply to fully electric vehicles as well. The amount could potentially vary depending on the type and weight of the vehicle. Larger and heavier vehicles, which impose greater strain on roads, might pay more than lighter models. In the island province of Hainan, a pilot program already uses satellite navigation to track certain vehicles. Data collected could serve as a basis for dynamic road tolling that depends on distance traveled and vehicle category. However, such a system raises questions regarding privacy protection, tracking accuracy, and how collected data would be processed. So far, no final decision has been made on implementing a nationwide mileage-based tolling system. Benefits for electrified vehicles are gradually diminishing Chinese authorities have begun to gradually limit tax incentives that have long encouraged the purchase of electric and other electrified vehicles. The tax rebate on purchasing new energy vehicles has been reduced to five percent, and the maximum amount of incentive has been capped at 15,000 yuan, approximately 1,800 euros. It has also been announced that the annual tax exemption for plug-in hybrids and electric vehicles with gasoline generators will be abolished. These changes show that electrified vehicles in China are slowly losing the preferential position they once held during earlier stages of market development. Manufacturers are being urged to produce lighter vehicles Authorities are not only considering new taxes but also want to influence the design of vehicles themselves. Mandatory energy consumption data makes it harder for manufacturers to achieve greater range solely through the installation of larger and heavier batteries. This encourages companies to use lighter materials, improve aerodynamics, and enhance powertrain efficiency. State media have become increasingly open in criticizing overly heavy personal vehicles, signaling a shift in policy priorities towards sustainability and infrastructure sustainability.