Owning an EV in Texas May Soon Get More Expensive

New state legislation in Texas would require owners of electric vehicles to pay a $200 annual fee, a move lawmakers say would offset losses in gas taxes but that critics say is unfair. The Texas House passed the bill 145-0 on Thursday, and it's been sent on to Gov. Greg Abbott for signing.

The bill calls for EV owners to pay an annual $200 registration and renewal fee for their vehicles. At time of purchase, the fee would be $400. Texas lawmakers say they created the bill to get EV owners to contribute to the gas tax, which funds the maintenance of Texas highways. 

"Each time an all-electric vehicle gets on the road and displaces a gas-powered vehicle, the state highway fund loses money," Sen. Robert Nichols, the bill's author, told Spectrum News. "This cost adjustment equalizes road use consumption between electric vehicles and gas-powered vehicles."

But critics of the legislation have said it puts a larger financial burden on EV owners and fails to address challenges to road funding in Texas. Drivers of gas-powered vehicles pay an average of $71 a year in Texas, according to a study conducted by Consumer Reports last year.  

"A high, flat fee on electric vehicles may seem to some like a politically expedient solution, but it is not an effective or equitable one," Chris Harto, senior policy analyst, transportation and energy, at Consumer Reports, said in a press release when the study came out. 

If signed, the bill would go into effect Sept. 1. Abbott's office didn't immediately respond to a request for comment. 

Sales of electric vehicles are on the rise thanks in part to the EV tax credit and the Biden Administration's push to electrify infrastructure through the Inflation Reduction Act. 

Earlier this month, the Environmental Protection Agency proposed a new emission standard that, if adopted, could increase sales of EVs nearly tenfold by 2032. 

For more on electric vehicles, here's how to claim the $7,500 electric vehicle tax credit and what you need to know about EV charging stations in the US.