Europe and the United States need to prepare for lower gasoline and diesel tax revenues if electric vehicle sales skyrocket as some analysts predict. For example, if electric vehicles were to represent 60 percent of U.S. new car sales by 2030, annual tax revenue (federal and state) would be reduced by $10 billion, or about 14 percent compared to if electric vehicle sales remained flat at 1 percent of new car sales. If electric vehicle sales reached 20 percent of new car sales, gasoline revenue would still fall by $3 billion, or about 5 percent.sup>1 California, which has the highest number of electric vehicles, would be hit hard as it currently has the sixth largest gasoline tax.sup>2The state recently passed an increase to its gasoline tax of $0.12 per gallon (up to $0.52 a gallon from $0.40 per gallon) and an increase in its diesel tax by $0.20 per gallon, both of which will take effect on November 1.sup>3 The increase will make its gasoline tax the second highest in the country, behind only Pennsylvania.