Not your typical registration… Starting Friday, EV drivers in Texas will pay a $200 annual registration fee (plus a $400 upfront fee for new electric cars). The Lone Star State, which has the third-highest number of EVs in the US, joins 32 other states in imposing some form of annual EV fee. Lawmakers say the fees offset gas taxes lost in the switch from fuel tank to battery, but critics say the charges are overly punitive.
Lopsided: Texas EV owners will pay almost double what the average Texas driver pays annually in gas sales tax. Texas’ gas tax, unchanged since 1991, is one of the cheapest in the US. Meanwhile, its EV registration fee will be one of the highest.
Perception vs. reality: The lifetime cost of EVs is still cheaper than gas vehicles, even in states with high registration fees. But opponents of the charges say they could still dissuade consumers from switching to electric.
Battery burden: EV advocates argue that the high fees like the ones in Texas are part of a trend mostly in Republican-controlled states to create potholes on the road to America’s electric transition.
Highway robbery… or highway funding? Federal and state gas taxes raise about $90B/year to build and repair roads and bridges. A 2020 study found that EVs had already reduced gas tax revenues by $250M annually, and those fuel tax $$ weren’t enough to begin with: Congress has transferred $200B+ since 2008 to keep the federal Highway Trust Fund solvent.
New tech requires new models… Unlike gas taxes, EV reg fees are one size fits all, so someone driving a Tesla for Uber pays the same fee as someone barely using a Chevy Bolt. EV-charging-station taxes have cropped up, too, but it's estimated that 90% of charging happens at home. Experts say an EV/gas-tax analogue will eventually be necessary to foot infrastructure bills, but a straightforward solution may not exist.