Republicans in Congress add $250 annual federal EV tax to transport bill - Ars Technica

Overview

Republicans in Congress add $250 annual federal EV tax to transport billvar abtest_2146708 = new ABTest(2146708, 'click');

Five principles should determine how you fund transport, says Consumer Reports.

Details

They might be better than gas-powered cars in most conceivable ways, but electric vehicle sales are having an undeniably hard time right now. The cause is no mystery: since January 2025 the US government has been actively hostile to the idea of energy efficiency and in the intervening months has taken an axe to fuel efficiency regulations, prosecuting polluters, and the consumer-facing tax credit.

That last one had the effect of bringing forward sales from people who needed an EV and knew the credit was expiring at the end of last September, leading to a rosy-looking Q3 2025 followed by a rather bad Q4. Things got even worse this year—in January just 5.1 percent of all new vehicles sold were EVs, compared to 8.3 percent in January 2025. But the government’s antipathy toward EVs isn’t done yet. House Transportation and Infrastructure Committee Chair Sam Graves (R-Mo.) wants to include an annual

This is the second time Graves has tried to tax drivers of more efficient vehicles; last year the committee under Graves wanted to include an escalating EV tax, starting at $200 annually, into the budget but was unsuccessful.

Federal highway spending is funded by taxes that drivers pay when they buy gasoline (or diesel), and since EVs don’t use any fuel, they don’t contribute to maintaining the roads. As arguments go, it holds water. EVs do use the roads, and since they’re usually a few hundred pounds heavier than an equivalent gas car, they do wear those roads a little more, although given that wear scales with the fourth power of weight, neither compares to an ambulance or bus or garbage truck. And at some point in the future, when EVs comprise a meaningful percentage of the US daily driving fleet, some kind of road use fee would be entirely appropriate.

When only 1 in 20 new cars is electric, the move is little more than symbolic, particularly since the federal gas tax hasn’t been increased since 1993. “EV drivers should pay into the road funding system, but taxes on EV drivers alone—no matter how excessive—won’t solve the larger problem of transportation funding shortfalls,” said Chris Harto, Consumer Reports’ head of sustainability advocacy. Harto and policy analyst Dylan Jaff have written a white paper with a number of principles for policymakers like Graves to consider when trying to address surface transportation funding.

Taxes on fuel and a registration tax are not the only possibilities: There are also road tolls; we could levy a tax on public EV charging similar to fuel; we could charge drivers based on annual miles traveled; or even take money from the general fund. And each of these has its pluses and minuses. Tolls or charging per mile actually driven would be the fairest, but both have some privacy concerns. A fuel excise tax is easy to collect and is linked to the amount someone drives, but it’s disconnected from the road damage caused by weight or pollution, and as we have seen since 1993, it appears very difficult to make this tax increase in line with inflation.

It’s important that any tax or fee is proportional so that the drivers having the most impact on the system pay more than drivers who have less impact. There should also be fairness between consumer vehicles and commercial vehicles (which make up all of the heaviest and thus most damaging vehicles on the road) so that consumers aren’t unfairly being taxed to subsidize businesses. The tax or fee should be easy to collect and not add another extra burden upon the driver. Drivers’ privacy needs to be protected so as not to hand over a complete record of someone’s travel. And the revenue collection should be stable—roads need regular, steady funding, which means tracking inflation as road repairs become more expensive and remaining flexible as travel patterns or fuel types change.

Those points seem eminently sensible to me. As for the proposed $250 federal EV registration fee, as Harto and Jaff note, “EVs have not played a significant role in the downward trajectory of federal or state transportation infrastructure revenues, nor can they currently make a significant contribution to reversing those declines.”

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Key Takeaways

• Republicans in Congress add $250 annual federal EV tax to transport billvar abtest_2146708 = new ABTest(2146708, 'click');

• Five principles should determine how you fund transport, says Consumer Reports

• They might be better than gas-powered cars in most conceivable ways, but electric vehicle sales are having an undeniably hard time right now

• That last one had the effect of bringing forward sales from people who needed an EV and knew the credit was expiring at the end of last September, leading to a rosy-looking Q3 2025 followed by a rather bad Q4

• This is the second time Graves has tried to tax drivers of more efficient vehicles; last year the committee under Graves wanted to include an escalating EV tax, starting at $200 annually, into the budget but was unsuccessful