Texas bill seeks to impose arbitrary fee on EVs

By Ben Delman on April 11, 2019

Lawmakers in Austin are considering a bill, HB 1971, that would charge a $200 annual fee to electric vehicle (EV) owners and a $100 annual fee to owners of gasoline-electric hybrid vehicles. The bill aims to recoup gasoline tax revenue that tax funds road maintenance and upkeep. But these fees are punitive to EV and hybrid owners, do not account for the taxes they already pay, and discount the benefits increased EV and hybrid adoption bring to everyone.

The amount of tax an owner of a gasoline-powered vehicle pays is based on how much they drive. The more they drive, the more gasoline they buy and the more taxes they pay. Also, the more they drive, the more wear and tear they contribute to the roads.

In contrast, the flat fee Texas legislators would place on electric vehicle owners could not be lowered by driving less. In effect, EV and hybrid owners could wind up subsidizing road repair from gas-powered vehicles. Hybrid owners are doubly taxed since they also pay gasoline taxes on the fuel their vehicles use.

According to the Environmental Protection Agency, the average vehicle gets 24.7 miles per gallon. The average Texan drives 16,347 per year according to the Transportation Federal Highway Administration. Texas taxes gasoline at 20¢/per gallon, so the average gasoline powered driver would pay $138 per year in gasoline taxes, or roughly 30% less than HB 1971 would make EV owners pay. On top of this proposed fee, EV and hybrid owners are already taxed based on the amount they drive. This comes in the form taxes on the electricity they purchase to power their vehicles.

Texas’ growing EV and hybrid market benefits all consumers. Vehicle charging can broadly lower electricity costs for everyone. Electric vehicles are more than just a means of transportation. They are also large batteries that can help smooth electricity demand. The growth of electric vehicle adoption also creates jobs. More than 15,000 Texans are employed in the EV and hybrid sector.

Pairing solar and EVs is a natural choice that allows drivers to power their vehicles with a fuel source that they own. Imposing unfair fees will only serve to limit consumer choice.