Should electric car owners be TAXED? Row breaks out over plan to charge eco motorists in Texas a new registration fee – which is EIGHT times higher than what gas drivers pay
Should Electric Car Owners Be TAXED? Arguments erupt over plan to charge Texas eco-drivers a new registration fee — eight times what gas drivers pay
- Residents who already own an electric car must also pay a $200 registration fee
- The measure is expected to generate approximately $38 million in revenue for the state
- Texas previously offered a tax break of up to $2,500 for EV purchases
Under a new policy, Texans who buy an electric vehicle will have to pay $400 to register their car — eight times as much as gas drivers.
Residents who already own an electric car will also have to pay a $200 registration fee under the regulation, which takes effect on September 1.
The measure, which is expected to raise about $38 million in revenue, is being imposed to ensure that EV drivers contribute to highway costs, which the state normally pays through fuel taxes.
Texas previously offered a tax credit of up to $2,500 for the purchase of electric vehicles, but the program only ran until January of this year.
Now EV owners in the state can only take advantage of federal incentives, which offer $7,500 in tax breaks to motorists who invest in certain models.
Texans buying a new electric vehicle must pay $400 to register their car under a new law that takes effect Sept. 1
Texas previously offered a tax credit of up to $2,500 for the purchase of electric vehicles, but the program only ran until January of this year.
Critics of the new law say it will discourage people from buying eco-friendly vehicles — and that it won’t effectively address the state’s problems with road financing. Nonprofit organization Consumer Reports described it as a “punishment tax for people who choose to go electric.”
That said Tesla owner Robi Chapman KCENTV that it would be a fairer way to balance the lost gas tax revenue by making electric vehicle owners pay how much they drive.
“It’s very easy to see how many miles you’ve driven and charge an appropriate rate for an appropriate tax, but certainly not a $200 flat fee for everyone,” Chapman said.
The registration fee also raises questions about whether Texans will pay more to own an electric car than for a gas-powered model.
Standard vehicle registration fees in the state are around $50, so Texans now face a one-time $350 raise for new EV drivers and a nearly $150 raise for annual renewal.
Electric cars are much more expensive to buy than their petrol cars – and it can take up to a decade for an electric car to break even.
Figures from car dealer Edmunds show that the average cost of a new petrol car in May of this year was $47,892, while the average electric car would cost $65,381.
Texas isn’t the only state to raise electric car registration fees.
According to the National Conference of State Legislators32 states have additional charges for EV drivers, with a large portion of the revenue going to fund highways.
South Dakota and Hawaii charge the lowest cost at $50, while Washington residents pay the highest at $225.
It comes after Bank of America added benefits for electric car owners to its rewards program earlier this month.
Bank of America added benefits for electric car owners to its rewards program earlier this month
The bank’s Customized Cash Rewards credit card now offers 3 percent cashback at EV charging stations – in addition to the offer for traditional gas station purchases.
It joins US Bank, which expanded its gasoline rewards category to include electric cars in January 2022, and Sam’s Club Mastercard, which announced a 5 percent cash-back deal on EV purchases in May 2022.
The move comes after Bank of America saw growing demand for a green rewards program.
In the first half of this year alone, the company has seen a 44 percent growth in the number of electric vehicle charging transactions on its cards, the company said in a statement.