Tomorrow Investor

New Texas Law Wants EV Owners to Pay Up


Electric vehicle (EV) owners in the state of Texas are grousing over a new state law which will require them to pay around $400 up front to register their vehicles with the state’s Department of Transportation.

Texas Senate Bill 505 takes effect on Friday, September 1st. Under its implementing rules, electric vehicle owners are required to pay the said $400 registration fee for new vehicles, and about $200 for previously registered EVs. Upon payment, the registration will be good for two years.

But why is the state government charging so much? The fees for EV owners are considerably higher than for those using more conventional vehicles, but Texan lawmakers claim that EV owners have not contributed to a fund for public infrastructure that is used to maintain existing roads or build new ones.

How Much Has Texas Lost?

In 2020, the Texas state government reported that it lost around $200 annually in both federal and state gasoline tax money whenever car owners replaced their gas-powered vehicles with EVs. The taxes earned form the basis of the Department of Transportation’s State Highway Fund which is used for the upkeep of public roads and streets.

While EV drivers don’t have to pay gas taxes, they still use the same roads – something that the government finds unfair. While EV owners remain a minority in Texas for now, the recent surge in EV demand could change the game. As a result, Senate Bill 505 needs to come into play to ensure that EV owners also pay for the privilege of using public thoroughfares.

A Hotly Debated Issue

While environmentalists, consumer advocates, and lawmakers agree that EV owners need to be taxed for using the roads, it was only recently that the debate over how much they ought to pay came to an end.

Some have opined that Texas ought to charge just enough to cover lost state revenues, as the federal government may have its own taxation plan for the EV sector and its users.

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