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Texas Legislators Working on Forcing EV Owners to Pay up to $400 Fee

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【Summary】Since the state isn’t getting any gasoline tax from electric vehicle owners, it’s looking to charge owners an annual fee to help out with roads and other vehicle infrastructure projects.

Original Vineeth Joel Patel    May 23, 2021 4:30 PM PT
Texas Legislators Working on Forcing EV Owners to Pay up to $400 Fee

In the United States, the majority of roads and other automotive-related infrastructure projects are paid for by gas taxes. As the world moves toward an electrified future, the gas tax simply won't exist. This has left some states worried about how projects will get funded. While we understand that a one-size-fits-all fix doesn't exist, Republican legislators in Texas have a not-so-good idea that involves more taxes.

EV Owners Would Pay More

Senate Bill 1728 is currently being discussed in the Texas state senate. It would increase fees on electric vehicles and require owners to pay some money since they're not paying for gas and the associated tax. Currently, the legislation is pitching the idea of an annual fee that's somewhere between $190 and $240. EV owners that drive more than 9,000 miles a year would have another $150 tacked on to the figure. An additional annual surcharge of $10 is also mandatory and will go toward a charging infrastructure advisory council.

The fees would affect 300,000 vehicles and bring in $37.8 million for the State Highway Fund for the 2022 fiscal year. That figure would climb to $135,594,000 for the 2026 fiscal year. If the bill passes the state senate, it would go into effect on September 1.

As Car & Driver points out, Texas isn't the first state to look at charging EV owners to make up for the fact that they'll be getting around the gas tax. But Texas' figures seem ridiculously high for no apparent reason. Plug In America, an electric-vehicle advocacy group, published a white paper last summer that claimed the average light-duty vehicle owner in the U.S. pays just $73 in annual gas taxes.

Is There A Good Fix?

Additionally, the group found that a lot of states require EV owners to pay an EV registration fee that range from $50 to $200. In Texas' case, it looks like the state wants EV owners to pay more than owners of gasoline-powered vehicles for automotive-related projects in the state.

With Tesla set to build a factory near Austin, we don't think the new bill will go over well in the state. Since Gigafactory Texas is scheduled to start operating by the end of this year, we doubt Tesla CEO Elon Musk would do something drastic, like pull the plug on the facility. But this could have a large effect on how many electric vehicles are registered and sold in the state.

Like we said, a perfect compromise doesn't exist. But the Plug In America group supports a program where EV owners are charged for the actual miles they drive each year, while considering the size of the vehicle they're driving. These are called road usage charge programs. We're not sure if road usage charge programs are the best way to move forward, but they're certainly better than Texas' proposed bill.

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