- Drivers pay gas taxes that go toward road repair and maintenance.
- But EV drivers don’t buy gas, and some states say they’re losing money as fewer drivers paying taxes.
- In Texas, EV drivers are getting hit with some of the highest fees to make up for it.
Drivers in Texas who think they’re skirting gas taxes by driving electric should think again — the Lone Star State wants them to pay for their fair share, too.
Drivers essentially pay for their road use at the pump through gas taxes, which get funneled to state road repair and maintenance. But since EV drivers don’t ever need to fuel up, they’re not paying that tax.
Politicians, especially in Texas, say not so fast. Starting next month, EV drivers in the state will have to pay $200 to register their plug-in cars and trucks, which some estimates say is double what gas-guzzling vehicle drivers might pay at the station. For drivers buying a brand-new EV, the fee is $400 upfront.
Texas, meanwhile, has one of the cheapest gas tax rates all US states at $0.20 per gallon, less than the national average of $0.29.
The costly EV registration fees are designed to level the playing field. States claim they’re losing money as more drivers go electric, but EV adoption was only at about 6% in the US at the end of 2022.
The divergence is playing out mostly in conservative states. Arkansas, a historically red state, for example, has a relatively low gas tax at $0.25, while its pure-EV registration fee is also $200.
California, leaning far more democratic, has the highest EV concentration in the US — 21% of the new car market — with a gas tax of $0.58 and annual EV registration fees of up to $175.
Steep EV registration fees are something that many industry observers say serve as yet another barrier to EV adoption. The price of these vehicles already weighs on buyers’ minds, as does the potential cost to plug them in compared with fueling a gas-powered car. Adding an unexpected registration fee is another expense associated with switching to electric. And a slowing rate of adoption is a looming threat for automakers slating billions of dollars to go electric, much of which is getting invested into domestic battery and EV factories in the US.
It’s important to note that EV prices are starting to come down (and there are some affordable models available now), many estimates suggest the electricity needed for an EV is still less expensive than gasoline, and these registration fees vary significantly by state.