Texas Continues Its Attack On Electric Cars & Trucks — To Implement $200 Annual Fee On EVs

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Oy, Texas. … First, Texas decided to not allow people to buy Teslas in the state. It’s a long and complicated story, but the funny thing is that you still can’t go into a Tesla store and buy a Tesla in Texas, yet Tesla’s global headquarters is now located there and “Giga Texas” is set to become one of the largest EV factories in the world. Now, apparently to pay Tesla back a bit, Texas is going to slap a $200 annual fee on EV owners. There’s humor in there somewhere.

I guess this is what you do to show your appreciation for a huge new economic development project, cleaner air, and a livable climate?

The Texas legislation isn’t fully in force yet, so there’s still time for a miracle — but let’s not count on one. The Texas state legislature passed the bill this week and it’s now on Governor Greg Abbott’s desk. Governor Abbott hasn’t exactly been a champion of progressive causes, or anything good ever. He’s been one of the most anti-democratic and anti-progress governors in recent memory. More likely than not, he signs the bill into law and any Texan with an EV gets a new $200 tax/bill to add to their “fun things to do next year” list. There is, of course, a slim chance Elon Musk gives Abbott a call and convinces him to veto the bill while laughing about Republican attacks on human rights, US democracy, and a stable climate.

Overall, while other places are encouraging electric vehicle sales with financial subsidies and stronger fuel economy regulations, Texas is going backwards by disincentivizing electric vehicle purchases.

The argument is that EVs don’t pay to build and repair roads since they don’t pay gas taxes. First of all, gas taxes don’t really cover most road construction and repair these days anyway. States and other levels of government have to tap into other budgets for that since they haven’t been willing to raise gas taxes on the public in decades. I don’t know the exact case in Texas, but I did find the state bragging about the fact that “Texas’ taxes on gasoline and diesel are the lowest among the 10 largest states.” They’re seventh lowest overall in the whole country. So, more likely than not, those frail gas and diesel taxes aren’t covering too much. Secondly, as implied above, we’re at a phase when EV adoption should be incentivized with everything we’ve got, not the opposite, deterred. Sure, go ahead and tax EVs in the future when they make up a big portion of the market and this is truly needed. This is not that time.

Also, as Consumer Reports notes, the $200 annual fee is arbitrary and is possibly just an attack on EVs and EV adoption on behalf of the fossil fuel industry. (Unheard of, I know.) Consumer Reports estimates that, under the logic of the bill, the annual tax should be just $71, not $200. “As EVs continue to grow in popularity and consumers gain interest in accessing cost-effective technology, states need to consider alternative strategies to address the issue of decreasing gas-tax revenues to fund roads and highways,” said Dylan Jaff, policy analyst at CR. “Consumers should not be punished for choosing a cleaner, greener car that saves them money on fuel and maintenance. The fees proposed in this bill will establish an inequitable fee scale for EV owners, and will not provide a viable solution to the long-standing issue of road funding revenue.” So, even if you agreed with the arguments Texas Republicans have put forward, you should conclude $71 is a fair fee, not $200.

All in all, this is a stain on both Texas and the United States as a whole. It’s a policy that clearly and boisterously goes backward. It’s so counterproductive that, even though it’s happening in Texas, it’s hard to believe.


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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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