Electric Vehicle Fees May Soon Cost Drivers More Than Traditional Vehicles

With many states considering imposing a fee on Electric Vehicles, drivers may be left with a much heftier bill than those with regular gas vehicles.

According to an article by autonews.com, state legislators see annual fees on hybrid and electric cars as a way to offset gasoline tax revenue lost from having more of those vehicles on the road. While many states are still in the beginning phases of imposing this fee, 26 states with proposed or existing electric vehicle fees expect consumers to pay upwards of 3x the price of the annual gas tax. In states like Arizona and Texas, electric vehicle drivers can expect to pay more than 200% higher fees than those with vehicles that run on gasoline. 

According to Consumer Reports, these states have implemented or proposed EV fees of various rates depending on what the state legislation deems appropriate.

“Clearly the trends are not favoring the gas tax both in terms of fuel economy and inflation, and those two forces are really what’s driving down the revenue and what’s causing problems for states,” said Chris Harto, Consumer Reports senior policy analyst. “Right now, it’s not EV adoption.”

While the fees for owning an electric vehicle are becoming more and more costly for consumers, the proposed fees are only expected to generate 0.04 percent of all highway state funding (in states with a >200% fee). This underwhelming number begs the question, are the EV fees really about highway funding? Or does the lofty expense help to put money back in fuel companies pockets?

While this is still an ongoing debate, it’s no question that the imposed fee on electric cars is going to inevitably deter some consumers. One way to attract EV drivers, however, is to impose a lower fee on vehicles. Arkansas Department of Transportation spokesman Danny Straessle told Automotive News the state expects to raise $2 million from higher registration fees for hybrid and electric vehicles, a policy he said started as a fairness concept.

Evidently, the truth is in the numbers. The states that treat their drivers with “fairness” when it comes to the fee imposed on electric vehicles have more EV drivers, in turn, bringing more revenue to the state along with less carbon emissions into the atmosphere. States with fees that are more steep however, are suffering from less EV drivers, meaning not only less state income, but a heavily polluted environment for citizens.