EV owners in Texas face $200 annual fee

States have taxed motorists at the pump for more than a century. However, as electric cars gain ground, what happens when people stop refueling altogether?

State lawmakers are increasingly imposing annual fees on EV owners, arguing they should pay because they still rely on public infrastructure to get around. Texas is on track to become the latest state to levy such a tax, following more than a dozen others, including Georgia, Michigan and Ohio.

The Texas Senate passed SB 505 in late March. This week, the state House passed a similar bill, sending it to Gov. Greg Abbott’s desk. The latest version of the bill sets an annual registration fee of $200 for electric vehicles, with exceptions planned for slow-moving “neighborhood electric vehicles” as well as motorcycles, mopeds and motorcycles. The bill states that the resulting fees “shall be deposited to the credit of the state highway fund.”

While Texas isn’t alone in moving forward with such a bill, its $200 fee is on the high end, as is only Georgia. Colorado is the state with the lowest electric vehicle fee (excluding states that do not have fees), at $50 per year.

Speaking against the bill in a statement to local media outlet KRLD, Environment Texas Director Luke Metzger argued that the $200 fee is punitive and “will make it harder for Texans to afford these clean vehicles that are so critical to reducing air pollution in Texas.”

Electric cars are still priced out of reach for many Americans. In September 2022, the average price of electric vehicles was $65,291, compared to $48,094 for gas consumers, according to Cox Automotive.

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EV owners in Texas found themselves subject to an annual fee of $200, thanks to a new law signed by Gov. Greg Abbott. Starting in September 2021, the fee, which is believed to be the first in the nation, will be used to offset lost fuel tax revenue. In addition to the fee, EV drivers in Texas will also be required to display a special sticker on the rear window to indicate the registration of the vehicle.

The intention of this law is to help state and local governments maintain the same level of funding for road and bridge maintenance and construction, by ensuring that EV drivers are contributing their fair share of taxes to the system. Governor Abbott stated, “Electric vehicles are becoming more prevalent every year, so it is critical Texas maintains a fair system where all vehicle owners help pay for the roads they use.”

At Ikaroa, we believe that the charging infrastructure should be increased to support the increasing popularity of EVs in Texas to make public charging more accessible and promote more widespread adoption. With the new legislation in place and the steps taken to provide more charging infrastructure, we hope that the future of electric vehicles in Texas will continue to develop.


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