26-05-2025
Got an EV? You Might Be Paying New Hidden Fees, Thanks to Congress
EV and hybrid owners have ample reasons to be unhappy
If you have listened to the evening news this week, you probably would have known that the U.S. House of Representatives passed the 'One Big Beautiful Bill Act' early on Thursday, May 22, right before lawmakers are set to return to their districts.
The 'beautiful' bill has already drawn a lot of attention due to landmark measures packed into the document, including significant tax reform based on major cuts, Medicaid and SNAP reform, increased immigration spending, and an increase to the national debt ceiling, to name just a few.
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If passed in the Senate, EV and hybrid ownership may get a little more expensive
However, packed into the text of the nearly 1,000-page bill are some measures that will affect American motorists, especially those who seek to free themselves from the crutch of the gas pump. Hidden very deep in the bill's text is an amendment titled Section 10004, or 'REGISTRATION FEE ON MOTOR VEHICLES.' This amendment states that the federal government will impose annual registration fees of $250 for electric vehicles and $100 for hybrids, which individual states' motor vehicle departments will collect.
Lawmakers like Rep. Sam Graves (R-Mo.), the chairman of the influential Transportation and Infrastructure Committee, said after the bill was passed that such a provision would help fund the Highway Trust Fund, the main source of federal highway funding. He argues that as EV ownership increases and drivers adopt more fuel-efficient cars and hybrids, the gas tax could lose its relevance very quickly.
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'The bill includes provisions from the Transportation and Infrastructure Committee to provide historic investments in the United States Coast Guard to strengthen our national and border security, as well as […] ensuring that electric vehicles begin contributing to the Highway Trust Fund,' Graves said.
The Highway Trust Fund is funded in part through the gas tax, which is reflected in the price of gasoline and diesel fuel. Currently, the gas tax is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel, a rate that has not been raised since October 1, 1993. Graves originally tabled this provision in the US House of Representatives Transportation and Infrastructure Committee in late April, where it passed and was added onto the 'Big Beautiful Bill' after a 36-30 vote.
Graves's proposal in the BBB will impose enforcement responsibility on the states. Specifically, states will be charged 25% on top of the calculated amount of funding they were expected to bring into the Highway Trust Fund if their motor vehicles departments do not collect the respective EV and hybrid fees.
'The Administrator shall withhold, from amounts required to be apportioned to any State under section 104(b), an amount equal to 125 percent to the amount required to be remitted under subsection (c)(2),' the bill says. 'The Administrator shall withhold the amount on the first day of each fiscal year beginning after September 30, 2026, in which the State does not meet the requirements of subsection (c).'
This is not the first time that congressional lawmakers have proposed some sort of 'fairness' fee targeted at EV owners. In February 2025, Senator Deb Fischer (R-NE) introduced the Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE) Act, which would add a $1000 fee to EVs at the time of purchase, aimed at recouping around 10 years' worth of federal gas tax revenue per car.
However, it should be noted that this sort of doctrine has already been enforced at the state level. According to the National Conference of State Legislatures (NCSL), 39 states have a special registration fee for EVs to recuperate lost gas tax funding.
For example, EV drivers in New Jersey, which has reached nearly 200,000 strong as of December 2024, will have to pay a $250 annual electric vehicle fee in addition to their registration fee. This fee will increase by $10 per year for four years and exceed $290 starting in 2028. New Jersey's yearly EV registration tax proceeds will fund the state's trust fund for transportation projects and NJ Transit.
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Final thoughts
It should be noted that this provision affecting EV and Hybrid drivers is sandwiched in the BBB along with dozens of other amendments affecting critical programs such as Medicaid and SNAP, as well as raising the debt ceiling. According to Politico, several Republican Senators say they'll be making changes to the BBB, as many of the provisions could affect constituents in their states.
Politics aside, looking at the numbers, it is easy to see how the shift from traditional to alternative fuels could upend decades-old rules and legislation, especially regarding the gas tax and the Highway Trust Fund. However, finding a straight-line solution will require a lot of time, work, and understanding of EVs and the needs of EV buyers by our leaders.
