Teslas, other EVs could face new fee under Texas proposal
Panhandle House member wants to charge drivers $200 a year but faces pushback
The first electric vehicles built at the Tesla plant under construction in southeastern Travis County are expected to start rolling off the factory floor late next year — just in time for Texans who buy them to get saddled with a $200 annual fee from the state if a proposed new law wins approval.
The idea for the fee has been prompted by concerns that revenue from gasoline taxes will drop if electric vehicles made by Tesla and other manufacturers become more popular.
A major portion of the 38.4cents-per-gallon state and federal gas tax collected from drivers is used for road upkeep, but electric vehicles aren’t powered by gas.
More than two dozen other states already levy special fees on electric vehicles to account for the difference, although such charges have been criticized as exorbitant in many cases relative to what drivers of conventional vehicles pay in gas taxes.
“With the growing numbers of electric cars on the road, I think it is time that they pay a proportionate share of highway funding,” state Rep. Ken King, a Panhandle Republican, said during a hearing last year regarding the Texas proposal.
“The intent of this legislation is to ensure all vehicles driving in the state of Texas have the opportunity to contribute to the maintenance of our roads,” he said at the time.
A bill to enact the fees and earmark the money for roads that King authored during the 2019 legislative session died without making it to a full vote of the House. He has filed an identical proposal for consideration in the upcoming session that begins Jan. 12.
Taxes on motor fuels generated about $2.6 billion for the state’s highway fund during the 2020 fiscal year that ended in August, the state comptroller’s office reports. The figure represents a decline of about 4.5 percent — or $124 million — compared to fiscal 2019.
Still, with electric vehicles accounting for only about 2 percent of vehicles on roadways nationwide, the proposed new fees — which also would include a $100 annual levy for gas-electric hybrids — aren’t expected to be major revenue contributors. An analysis by the state’s Legislative Budget Board last year found King’s plan would produce no more than about $30 million annually by fiscal 2024.
King, whose newly filed bill would take effect Sept. 1 if it’s approved in the upcoming session, didn’t respond to requests for comment.
A number of enthusiasts of electric cars and other advocates for clean energy who turned out during last year’s hearing called the $200 flat annual rate unfair and too high.
Some said they didn’t object to helping pay for highway upkeep, as long as fees are tied to vehicle weight, miles driven or other tangible measures that impact wear and tear.
But Wedbush Securities analyst Daniel Ives said recently that he considers such fees to be counterproductive regardless.
“With Tesla building one of its most important footprints in Austin’s backyard, it would be very ironic (for state lawmakers) to pass a fee against electric vehicles,” Ives said.