- $400 registration fee for new EV.
- $200 renewal.
- Hybrid registration fee will stay the same.
Fair? Unfair? Texas has approved a law that introduces a registration fee for electric vehicle (EV) owners. Starting September 1, 2023, new EV owners will pay $400 to register their vehicles, while existing owners will pay $200 annually for renewals. The purpose of this fee is to compensate for the lack of gasoline tax revenue generated by EVs, as gasoline-powered vehicles contribute to road funding through a 20-cent per gallon tax.
The fee will not be applicable to hybrid vehicles, electric motorcycles, mopeds, autocycles, or neighborhood electric vehicles with a maximum speed of 35 miles per hour. The reaction from EV owners has been mixed, with some expressing frustration over the additional cost for owning an environmentally friendly vehicle, while others acknowledge the fee as necessary to support road infrastructure.
Texas joins more than two dozen other states that have implemented similar fees to counter the loss of gasoline tax revenue from EVs. These fees vary in amount and calculation method, with an average of around $100 per year. EV advocates suggest a mileage-based system as a fairer approach, but implementing such a system would be more complex and its revenue generation potential is uncertain.
This development is noteworthy for Texas, which is already a major hub for EV activity, hosting Tesla’s headquarters and manufacturing facility and having an increasing number of EV charging stations. The growth of the EV market in Texas, driven by factors like sustainability efforts, rising gasoline costs, and wider EV availability, positions Austin as a significant EV hub.
The impact of the new fee on EV adoption in Texas remains to be seen, as experts have differing opinions. While some believe it could discourage potential buyers, others argue that it will have minimal effect. Only time will reveal the true influence of this fee on the state’s EV market.