Congress Proposing a New $130 A Year Fee for EV Drivers

As wartime gasoline prices climb above $4.50 per gallon nationwide, electric vehicle owners have largely avoided the financial pain hitting drivers of gas-powered vehicles. But a new bipartisan proposal in Congress could soon increase ownership costs for EV drivers across the United States.

Lawmakers have introduced legislation that would impose a new $130 annual federal fee on electric vehicles beginning in 2029. The proposal, known as the BUILD America 250 Act, is intended to help fund road maintenance and transportation infrastructure currently supported in part through the federal gasoline tax.

Sam Graves, chairman of the House Transportation and Infrastructure Committee, said the proposal is designed to ensure EV owners “pay their fair share” for road usage.

Currently, gasoline-powered vehicle owners contribute through the federal gas tax, which adds 18.3 cents per gallon. EV drivers do not pay that tax directly, creating growing concern among lawmakers as EV adoption increases and fuel tax revenues decline.

Under the proposal, the annual EV fee would gradually rise by $5 every two years until reaching $150. Plug-in hybrid vehicles would also face a yearly fee starting at $35 and eventually increasing to $50.

Consumer advocates and environmental groups have criticized the plan, arguing the flat-fee structure unfairly penalizes EV owners. According to research from Consumer Reports, the average American currently pays between $70 and $90 annually in federal gasoline taxes, substantially less than the proposed EV fee.

Critics also argue that flat annual fees fail to account for actual vehicle usage. Drivers who travel infrequently, including many seniors, may pay only $40 to $50 annually in gas taxes today. Meanwhile, heavily used commercial vehicles such as rideshares, delivery fleets, and robotaxis can drive far more miles while paying proportionally less under fixed registration-style fees.

Many states already impose separate EV registration surcharges to support road repair funding. In Michigan, EV owners are expected to pay $267 in annual registration fees in 2026, while plug-in hybrid owners will pay $113. New Jersey currently charges EV drivers $270 annually and requires the first four years to be paid upfront.

The federal proposal has not yet become law. The legislation must still pass both chambers of Congress before reaching the president’s desk. Lawmakers are aiming to finalize transportation funding legislation before the current law expires on September 30.

“This draft includes an irresponsible tax for EV and plug-in hybrid drivers that will fail at meaningfully closing the Highway Trust Fund shortfall,” said Katherine García, director of Sierra Club’s Clean Transportation for All Campaign. “Now is the time to incentivize, not penalize, clean transportation options that curb emissions harmful to our health and climate.”

Albert Gore, executive director of the Zero Emission Transportation Association, said he “understands the need to maintain the solvency of the Highway Trust Fund,” but called the proposed fee “simply a punitive tax that would disproportionately impact adopters of electric vehicles, with no meaningful impact on maintain the HTF.”

EVinfo.net’s Take: Kill This Bill, Unfair to EV Drivers

I agree with the great Albert Gore and Katherine Garcia. Kill the bill. It is not fair. I’m an EV driver and want to pay my fair share of road taxes. But this is not the way.

Over the last year, a concerning pattern has emerged in federal transportation and environmental policy. Instead of accelerating the transition away from fossil fuels, the U.S. administration is loosening incentives and standards that protect public health and the climate. These decisions are not minor regulatory adjustments. They will increase harmful smog, worsen air pollution, undermine climate progress, and cost drivers more money over time.

In September, the federal electric vehicle (EV) tax credit was cut. This incentive helped make EVs more affordable for middle income Americans by narrowing the upfront price gap between electric vehicles and gasoline powered cars. Reducing the credit raises purchase costs and slows adoption at a time when scale and competition are driving prices down. When adoption slows, automakers face less pressure to expand production and invest in next generation battery technology. Consumers ultimately pay the price through reduced market competition and delayed cost declines.

There’s currently a large deficit of government spending supporting EVs. Killing this bill will start to be a move in the correct direction.

Electrification Coalition Executive Director Ben Prochazka released the following statement:

“Ending our nation’s dependence on oil for transportation is critical for American economic and national security. Oil prices are inherently volatile, as we are seeing now amid the war in Iran, impacting families and businesses across the country. Our best option to end oil’s monopoly over transportation is to give consumers more options to power vehicles with electricity produced domestically from a variety of sources.

EV charging infrastructure is an essential part of our nation’s transportation infrastructure. NEVI and CFI have supported the deployment of thousands of chargers nationwide, helping ensure that the millions of Americans who choose to drive electric now or in the future have reliable, accessible access to refueling infrastructure.

Though significant progress on charging infrastructure deployment has been made in recent years—thanks in part to the NEVI and CFI programs—a lack of access to charging remains a top concern among the many Americans interested in purchasing an EV. To ensure that charging infrastructure deployment keeps pace with increasing adoption, Congress should maintain current levels of funding for these critical infrastructure programs.

While all drivers should pay their fair share to fund transportation infrastructure, an unfair and punitive tax on EV drivers, higher than what most internal combustion engine vehicle drivers pay, is the wrong direction. Congress should instead pursue a fuel-neutral approach to addressing our transportation funding challenge.

The U.S. auto industry is falling behind our global competitors, particularly Chinese automakers, in the EV sector. Cutting the NEVI program and instituting a new tax on EVs will only put the United States at a greater disadvantage and risk thousands of American jobs.

EVs are more affordable than ever, with many now coming off of leases and entering the used market. They are the most cost-stable option for drivers looking to limit transportation costs amid volatile, high gas prices.

The highway bill should support reliable, affordable, and convenient transportation for all Americans, regardless of which vehicle they choose. To protect our economy and our national security, Congress should reject any proposals to eliminate funding for EV infrastructure or institute a punitive tax on EV drivers.”

I agree with Prochazka 100%. Thank you Ben.