EV Drivers Could Get Hit With a New $130 Yearly Fee Under Bill in Congress
Electric vehicle owners could soon be hit with a new yearly bill from Uncle Sam. A bipartisan highway funding package in Congress includes a $130 annual federal fee on EVs, along with a $35 annual fee for plug-in hybrids.
Supporters say the fee is about fairness, since EV drivers don't pay the federal gas tax that helps fund road repairs. Critics call it a punitive tax that would barely make a dent in the country's highway funding gap.
What the EV Fee Would Cost Drivers
The fee is part of the BUILD America 250 Act, a five-year, $580 billion transportation bill that funds roads, bridges, transit, rail and highway safety programs, according to Scripps News.
Under the proposal, EV owners would pay $130 a year and plug-in hybrid owners would pay $35. Starting in 2029, both fees would rise by $5 every two years, topping out at $150 for EVs and $50 for plug-in hybrids, according to InsideEVs.
States would collect the fee when drivers register their vehicles. A state that doesn't collect it would have 125% of the amount owed withheld from its federal highway funding, according to a committee summary of the bill cited by The Auto Wire.
Plug-in hybrid owners would pay both the $35 fee and the federal gas tax on the gasoline they use.
Why Lawmakers Want EV Drivers to Pay
The federal gas tax, about 18.4 cents per gallon, hasn't changed since 1993. That tax helps pay for highway work, but electric vehicles don't use gas, so their owners don't contribute.
House Transportation and Infrastructure Committee Chairman Sam Graves, a Missouri Republican, said the bill "ensures that electric vehicle owners begin paying their fair share for the use of our roads."
Rep. Rick Larsen of Washington, the committee's top Democrat, also supports the fee. "I came in in 2001 supporting the user-pays principle," he told E&E News in May, according to The Independent. Larsen said 20% of the money would go to the Department of Transportation's mass transit account.
Sen. Shelley Moore Capito, a West Virginia Republican, backs the idea too. "They use the roads, they should help pay," she said.
Critics Say It's a Punitive Tax
Not everyone is on board. Sen. Ron Wyden, an Oregon Democrat, called the fee "another right-wing ideological trophy" and said the proposal is "off the table" in negotiations.
Sen. Sheldon Whitehouse, a Rhode Island Democrat, said in May, "Slapping a fee on electric vehicles isn't a solution for the Highway Trust Fund."
Environmental and EV groups are also pushing back. Shruti Vaidyanathan of the Natural Resources Defense Council called it "a punch in the gut to the millions of Americans struggling to pay higher prices at the pump." Albert Gore, executive director of the Zero Emission Transportation Association, called it "simply a punitive tax."
Consumer Reports estimates the average American pays $70 to $90 a year in federal gas taxes, while occasional drivers and seniors pay about $40 to $50. The group has argued that a flat fee ignores how much people actually drive.
The fee would also only chip away at the funding gap. The Congressional Budget Office estimates it would raise a net $12 billion over a decade, which The Auto Wire calculates would cover about 3% of the highway account shortfall through 2031.
What Happens Next
The House Transportation and Infrastructure Committee approved the bill in May, but it still needs to pass the full House and the Senate before it can become law.
Current surface transportation programs have been extended through Dec. 11, and Graves wants a multi-year bill passed before this Congress ends. The CBO projects the first EV fee collections would come in fiscal year 2028.
Many states already charge their own EV registration fees. Michigan charges $267 for EVs in 2026, and New Jersey charges $270.
For drivers weighing the overall cost of going electric, Scripps News reported that at current gas prices, an EV driven 12,000 miles a year would take fewer than six years to cost less than a comparable gas-powered car, though other expenses could change that math.
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