EV Drivers Staring Down $250 Fee from Feds to Pay for Roads

Republicans in the U.S. House of Representatives advanced a bill, if passed into law, would charge electric vehicle owners $250 annually to replenish the dwindling Highway Trust Fund, currently fed by gas and diesel taxes.

The challenge of how to get EV owners to pay their fair share for road maintenance has been debated for several years now. Ideas have ranged from a use tax where vehicle owners would pay for each mile driven, tracked by devices in their vehicles to applying a tax to public charging stations just like at gas stations.

Most EV owners charge at home and a vociferous segment of that group contend they already pay steep taxes — to the utility companies. Those taxes are not transferred to any entity involved in road maintenance.

However, critics of the $250 fee — and $100 for hybrid owners — contend it’s too high. They note that gas and diesel vehicle owners pay something closer to $100 on average based on the 18.4-cent tax at the pump. Last year, the federal government collected $43.5 billion from gas and diesel taxes for the trust fund. The fund is facing a $142 billion shortfall during the next five years.

Fixing the funding

“The system for funding our federal surface transportation is broken,” said Rep. Sam Graves (R-Missouri) who proposed the bill and chairs the Transportation and Infrastructure Committee.

Some states already charge EV owners a flat fee to cover their share of state-maintained roads. The $250 fee is an increase from the original $200 initially proposed, but significantly lower than the $1,000 some Republican senators recommended in February.

Complicating the issue is that gas and diesel vehicle owners should probably be paying more as well. The U.S. Congress has chosen to not raise the pump taxes in about three decades, crimping the Federal Highway Administration’s ability to keep pace with repairs and maintenance.

More EV News

• Forget Tax Breaks, Republicans Want $1,000 Tax on Electric Vehicles
• Electric Mustang Mach-E Outsells Ford’s Classic Coupe — and Is Anyone Really Surprised?
• Trump Vows to Reverse Biden EV Policies

Paying more

If passed, EV owners will not only pay more than their internal combustion vehicle owning counterparts, but the rising number of electric vehicles sold represent a potential substantive increase in funds collected for the Highway Trust Fund.

However, there currently about 4 million EVs on U.S. roads not paying any kind of tax into the fund, representing a loss of about $415 million annually. Of course, as EV sales continue to rise, that gap will only increase.

Also, the bill exempts certain road users, such as commercial and government vehicles. InsideEVs.com points out that means users like rental car companies, Amazon and its Rivian-produced delivery vans and Class 8 semi trucks won’t be paying, despite the fact that the latter two create more road issues than light vehicles.

Collecting the cash

While the current gas taxes are collected at the pump, essentially, nabbing the $250 from EV owner could prove more difficult. However, there are provisions for that. As mentioned 39 states are already collecting some form of standard fee from EV owners so the federal government wants them to nab the feds money too.

In an era where states rights is a hot topic, why would states comply with this? Well, the bill has that covered. If a state declined to enforce and collect the fee, the government will order the FHWA to withhold funding equivalent to 125% of the registration fees beginning in 2027.

It should be noted that if the current gas tax were adjusted for inflation, InsideEVs noted, it would more than double to about 40 cents. If the gas tax was adjust to that number, then the proposed EV rate would be equitable.