High Texas electric car fee bill spells the end of EV road tax subsidies

The Texas House of Representatives voted unanimously to levy a US$200 annual fee on electric vehicle owners and has now sent the bill to Governor Abbott for approval. If it gets singed on, Texas will join the growing list of 20 states that levy annual registration or license fees on electric vehicles to compensate for the fact that their owners don't pay gas taxes at the pump.

These de facto EV road taxes range from $50 in Colorado, through $100 in California, to $200 in the outlier Georgia which the Lone Star state will now join at the top of the EV taxation totem pole. Prior to the bill's passing, Consumer Reports ran the numbers and sent a memo to the legislators arguing that the average Texas driver only pays $71 a year in gas and diesel taxes, so a $200 levy on electric vehicle owners that is not prorated for usage would be rather unfair.

In fact, some opponents of the bill argue that the extremely low Texas gas tax of 20 cents a gallon that hasn't been updated since 1991 would be the primary reason for a potential shortfall in the state's road tax finances, rather than EV ownership. The federal excise tax on fossil fuels, however, is about 18 cents per gallon on gasoline, so the Texas gas tax is already in the average ballpark.

According to Terri Hall, the founder of Texans Uniting for Freedom and Reform, the new EV fee will be an alternative approach to avoid toll roads, as the organization is "trying to come up with a way to help capture some of that road usage from EVs, especially since there’s been such a push for EVs and we’re seeing a lot more..." 

Moreover, electric cars weigh considerably more than their gas-powered counterparts and cause more wear and tear on tires or suspension components like ball joints. While this issue may be resolved somewhat with the advent of future technologies like solid-state batteries, according to Samsung, until then EVs will weigh more on public roads than the equivalent cars with internal combustion engines.

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