A new federal proposal is advancing to impose an annual EV road user fee of $130 on electric vehicle owners across the United States. If passed by Congress, EV drivers could face this new cost as early as next month.
According to recent reports by USA Today, the bipartisan transportation funding bill titled the ‘BUILD America 250 Act,’ introduced by the House Transportation and Infrastructure Committee, includes a provision to levy a federal fee on electric vehicle owners.
The bill proposes charging EV owners $130 annually, with a $5 increase each subsequent year up to a maximum of $150. It also includes a $35 annual fee for plug-in hybrid electric vehicles (PHEVs), which would scale up to $50 by 2031.
Background of the Proposed EV Fee and Highway Funding
The primary driver behind introducing the EV fee is a shortage of federal road construction revenue. Currently, the federal government levies a gasoline tax of 18.4 cents per gallon. This tax is deposited into the Highway Trust Fund and used for the construction and maintenance of roads and public transit facilities.
However, because electric vehicles do not use gasoline, they do not pay the federal fuel tax. Combined with improved fuel economy and a growing adoption of electric and hybrid vehicles, tax revenues are failing to keep pace with road usage, according to congressional explanations.
The federal gasoline tax has not been increased since 1993. According to the Tax Policy Center, the current fuel tax generates approximately $40 billion annually, while federal transportation infrastructure expenditures typically run around $60 billion a year.
Collection Method and Impact on Drivers
Lawmakers supporting the bill argue that electric vehicle drivers must also fairly share road maintenance costs. Rep. Sam Graves (R-Mo.), chairman of the House Transportation and Infrastructure Committee, explained that the EV user fee ensures that electric vehicle owners contribute an appropriate amount for using the roads.
The new fee is expected to be collected during the vehicle registration process. EV owners would pay the federal fee annually, separately from existing registration fees, upon registering or renewing their vehicles.
Unlike proposals that would tax vehicles based on actual mileage, this flat-fee approach does not require tracking drivers’ travel routes or mileage, thereby avoiding privacy concerns associated with monitoring location data.
However, the new fee creates an additional financial burden for electric vehicle owners. Consumer Reports notes that EVs can save owners an average of about $8,811 in ownership and maintenance costs over 200,000 miles compared to popular internal combustion vehicles in the same class.
The U.S. Department of Energy estimates that EV drivers can save up to $2,200 annually in fuel costs by choosing an electric vehicle over a gas-powered car, while fuel savings for hybrid vehicles are estimated at about $1,500 per year.
Nevertheless, the introduction of a federal fee will erode a portion of these savings. Drivers living in states that already impose separate EV registration fees could face an even heavier financial burden.
