Summary of Key Points
At present, there is a significant shortfall in funds for road maintenance in our country: annual revenue gaps on toll roads exceed 600 billion yuan, with maintenance expenditures accounting for only 5.7%; for ordinary roads, the popularity of new energy vehicles has led to a reduction in the fuel tax base, resulting in an annual maintenance gap of about 50%. Hainan, with the highest penetration rate of new energy vehicles in the country (62.9%), is facing the pressure of declining revenue from fuel surcharges and is piloting a "mileage-based fee" system (also known as a free-flow charging method). The industry calls for reforms such as equalizing the treatment of gasoline and electric vehicles or implementing a mileage tax (or a combined tax based on both mileage and vehicle weight) to achieve the principle of "the more you use the road, the more you pay." The core of the reform is not to increase taxes but to balance fairness and efficiency and find a sustainable funding mechanism.
How Large Is the Gap in Road Maintenance Funds?
Both toll roads and ordinary roads are struggling with financial difficulties:
- Toll Roads: In 2021, total expenditures amounted to 1.29 trillion yuan, while revenue from tolls was only 663 billion yuan, leaving a gap of 6279 billion yuan (compared to 661 billion yuan in 2013). Repayment of principal and interest accounted for 79.37% of the expenditures, and maintenance spending dropped from 9% in 2013 to 5.7% in 2021—meaning only 5.7 yuan out of every 100 yuan is used for road repairs; the remaining funds are used to pay loan interest, and some roads cannot even cover their basic maintenance needs.
- Ordinary Roads: These roads rely on fuel tax revenue (collected by the central government and then distributed to local authorities) for maintenance. However, with the increasing number of new energy vehicles and a significant decline in the growth of fuel-powered vehicles (only 430,000 new vehicles added in 2025, compared to 5.58 million in 2024), fuel tax revenue is not keeping up. Currently, 40% of ordinary roads are listed for maintenance but lack the necessary funds, and by 2030, additional costs of 300 billion yuan will be required for highway maintenance.
Why Is the Gap Getting Bigger?
There are two main reasons:
1. The Debt Burden of Toll Roads: In the past, "loans to build roads and tolls to repay the loans" helped China quickly develop its road network, but the debt has grown exponentially. Repayment of principal and interest is a fixed expense, so funds intended for maintenance are squeezed—similar to how most of your monthly salary goes towards mortgage payments, leaving little for other expenses.
2. The Loss of Tax Revenue for Ordinary Roads: New energy vehicles do not use fuel, so they do not contribute to fuel tax revenue, yet they still use the roads. With fewer fuel-powered vehicles, fuel tax revenue decreases, while maintenance costs (such as rising prices and increased road mileage) continue to rise, creating a growing disparity between funding needs and available funds.
Hainan Takes the Lead in Exploring Solutions
Hainan is the only province in the country without toll stations, having merged road maintenance fees and other charges into a fuel surcharge in 1994. However, with the highest penetration rate of new energy vehicles (62.9% of new vehicles), its fuel surcharge revenue has significantly decreased. Therefore, Hainan is piloting a "mileage-based fee" system. This system uses Beidou satellite technology to automatically calculate fees based on the distance traveled without the need to stop. For example, if you drive 100 kilometers, the fee is deducted directly from your account according to the standard rate. The Beidou system already covers the entire region of Hainan, and the pilot may start with commercial vehicles (such as trucks), which use the roads more frequently and cause more wear and tear.
Reform Directions: Equalizing the Treatment of Gasoline and Electric Vehicles, and Making It Fairer
The industry unanimously advocates for fairness: fuel-powered vehicles that burn fuel and contribute to tax revenue should also pay for road use. There are two proposed solutions:
- Mileage Tax: Charges are based on the distance traveled; the more you drive, the more you pay.
- Comprehensive Tax Calculation: This could include factors such as mileage, vehicle weight, and type of vehicle (e.g., heavier trucks pay more than lighter cars, and commercial vehicles pay more than passenger cars). Cui Dongshu suggests that essential household vehicles with low usage should pay little or nothing, while commercial vehicles with high usage should pay more. This approach ensures fairness without increasing the burden on ordinary citizens.
Experts point out that this aligns with the logic of fuel taxation: fuel tax is based on environmental pollution caused by fuel consumption, and a mileage tax is based on the wear and tear on roads due to use. Both systems aim to ensure that those who use the roads the most bear the cost.
Reform Is Not Just About Increasing Taxes
There's no need to worry that reform means simply raising taxes:
- Differentiate Between Essential Needs and Commercial Use: Ordinary household vehicles with low usage should not be heavily taxed, while commercial vehicles (such as trucks and ride-hailing services) should bear a larger share of the costs.
- Simple and Reliable Tax Collection: The technology for calculating fees using Beidou satellite positioning is feasible and must be easy to understand and trustable for everyone.
- Don't Copy Foreign Models Blindly: For example, the UK plans to tax electric vehicles based on mileage in 2028, but China's road system is different, so foreign models cannot be directly applied. The reform can start with heavy trucks on high-grade roads and gradually expand.
In summary, this reform aims to clarify the principle of "whoever uses the road pays" to ensure sustainable funding for road maintenance without unfairly burdening ordinary citizens.