Congress Considers Slapping New Fees on Electric Vehicle Owners To Replace Lost Gas Tax Revenue

A bipartisan agreement in the House Transportation Committee is calling for a new nationwide registration fee on electric vehicles, whose owners are no longer paying gas taxes, causing a loss in revenue to the Federal Highway Trust Fund. More than six million EV owners would face the $130 charge included in a five-year highway funding reauthorization bill unveiled Sunday. Plug-in hybrid vehicles would require a $35 yearly registration fee. The fee would increase $5 every two years until it reaches $150 for EVs and $50 for hybrids. Most owners are already paying extra state fees for owning EVs.“The BUILD America 250 Act ensures that electric vehicle owners begin paying their fair share for the use of our roads,” the committee’s chairman, Congressman Sam Graves, said in a release. The bill also makes smart and targeted reforms to our surface transportation programs, focuses on strengthening our core infrastructure system, drives innovation, bolsters safety, ensures states have the flexibility they need, and cuts red tape to get projects built faster.The new fee would help fund a funding shortfall for the Highway Trust Fund, which is primarily funded by a 18.4 cents per gallon federal fuel tax and is used for federal rail and highway infrastructure. As cars have become more fuel efficient, and some drivers turn to EVs, as encouraged by activists concerned about climate change, the funding has not kept up with spending needs. The Congressional Budget Office projects that the trust will be depleted in 2028 and could be $295 billion in the hole in 10 years.“A commitment to bipartisan lawmaking means finding compromise; while this bill does not include every priority, I am committed to building on the last bipartisan infrastructure law by creating good-paying transportation jobs, growing the economy, and safely transporting people and goods across the country by road and rail,” the top Democrat on the committee, Congressman Rick Larsen, said in the release.Committee leaders plan to formally introduce the legislation this week, with the ultimate goal of sending legislation to President Trump’s desk before the current funding bill expires on September 30.Supporters say the bill provides the trust fund with its first new stream of revenue for infrastructure in over three decades but critics dispute that it is a positive development.“Instead of investing in solutions that would offer more affordable commuting options and cut pollution, this bill does the opposite on both counts: deepening the affordability crisis while driving a nationwide surge in pollution. Its centerpiece is a new consumer tax on EVs that raises costs, increases climate emissions, and does nothing to meaningfully close the Highway Trust Fund shortfall,” the clean energy proponents, Evergreen Action, said in a statement.The Sierra Club says the bill would result in dirtier air, higher costs, and fewer consumer choices.“This draft includes an irresponsible tax for EV and plug-in hybrid drivers that will fail at meaningfully closing the Highway Trust Fund shortfall. Now is the time to incentivize, not penalize, clean transportation options that curb emissions harmful to our health and climate,” the environmental group said in a statement.The group also criticized the bill’s plan to cut funding for electric vehicle-charging infrastructure, freight electrification, and electric buses.The fate of the House proposal is unclear. Some Senate Democrats have voiced opposition to the proposed new expense for EV owners. “Fossil-fuel-backed Republicans are hell-bent on keeping Americans chained to the gas pump even as Trump’s war sends gas prices skyrocketing,” Senator Sheldon Whitehouse said in a statement to Politico. “Slapping a fee on electric vehicles isn’t a solution for the Highway Trust Fund.”The new registration would be a new burden on EV owners already punished at the state level. More than 40 states already have added registration fees for EVs, with New Jersey charging the highest annual fee of $270. Pennsylvania and Michigan also have EV fees that top $250 a year.

Congress Considers Slapping New Fees on Electric Vehicle Owners To Replace Lost Gas Tax Revenue

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