- EV owners in Texas will have to pay $400 to register their vehicles.
- Renewal registrations will be $200.
- Registration fee goes toward highway costs to supplement the gas tax.
As more Texas drivers purchase electric vehicles, Governor Greg Abbott signed a bill that replaces lost gas-tax income. To remedy the situation, Abbott signed the $400 new EV registration bill known as Senate Bill 505, which goes into effect on September 1, 2023.
Covering the Per-Gallon Gas Tax
Texas adds a 20-cent tax to the price of a gallon of gas, and the revenue from the gas tax pays for state highways, and some goes to Texas schools. Based on average miles driven annual, Texas drivers with gas-powered vehicles pay $130 per year toward the state-highway fund. The use tax is dependent on how many miles they drive, while the EV registration fee is a flat rate, regardless of the miles driven annually.
Flat Rate for EV Drivers
EV drivers will pay a flat rate of $400 when they first register their vehicle with the state. The annual renewal will be $200. It does not apply to two-wheel EVs like mopeds and motorcycles and to plug-in hybrid and mild-hybrid vehicles with electric motors and gas-powered engines.
Expected State Income
The income from the registration fees will bring at least $38 million to the Texas state highway fund. Vehicles with internal-combustion engines bring about $3.8 billion to the fund. Texas has about 200,000 electric vehicles, and drivers have already registered 37,000 new 2023 EVs in the state.
Impact of the Legislation
While some believe the new registration shows drivers that the state stands with the petroleum industry, others see it as a way to improve infrastructure. EV drivers dislike that they are paying more on average than drivers with combustion engines, especially considering the environmental impact of ICE vehicles.
Some fear that the increased registration fee could steer people away from choosing an EV, opting instead to choose an ICE vehicle. The new registration could push those who are considering an EV to purchase one before September 1 to avoid having to pay $400.
Texas drivers already pay a registration fee of $51.75, a county title transfer fee around $30, and a $10 local fee for new cars. Texas also has a 6.25% sales tax that is added to the cost of the vehicle. When purchasing a new EV after September 1, drivers will pay these fees plus the $400 new registration fee. Every year, drivers pay $51.75 to renew vehicle registrations, and EV drivers will pay $200 and $51.75 to renew their zero-emissions vehicles.
FEATURE IMAGE: TRACE HUDSON
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