China's EV boom creates road-funding crisis as petrol tax revenues collapse while repair bills rise

A South China Morning Post report published 21 June 2026 reveals that China's rapid transition to electric vehicles — which now account for over 60 per cent of new car sales — is eroding the petrol consumption tax that funded more than 80 per cent of ordinary road maintenance costs in 2021, according to the China Transport Planning and Research Institute. At the same time, heavier electric cars cause greater road surface wear, pushing repair bills higher even as tax revenue falls. Local governments, which depend on central disbursements from this petrol tax to fund road works, face growing pressure to identify new revenue sources.