New month, new fees.
For Texas electric vehicle owners, Friday isn’t just the beginning of September, but the start of a new vehicle registration fee—on top of regular vehicle registration fees. On Friday, a Texas bill enacted in May 2022 goes into effect which requires new EV owners to pay a first-time registration fee of $400. An annual $200 EV registration renewal will follow, according to the U.S. Department of Energy’s Alternative Fuels Data Center.
The fees go to the Texas State Highway Fund. While EV cost-saving is hailed on the Texas Department of Transportation’s own website—”Electric vehicle drivers save $500-$1500 per year in refueling costs compared to gasoline”—this is an extra fee to recoup lost gasoline-based fees and tax losses. Households with only fully electric vehicles are no longer filling up at gas stations, where taxes are collected for highway and road programs.
A growing number of states are adding electric-specific fees at purchase and registration renewal time. A tracker from the National Conference of State Legislatures has a list that includes 32 states (Arkansas, California, Colorado, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming) with fees for electric cars. It’s now 33 with Texas.
According to the nonpartisan association, the least offensive fees are in Colorado, South Dakota and Hawaii with a $50 charge. The priciest is $255 in Washington. Texas will join Alabama, Arkansas, Ohio and Wyoming with a $200 annual fee.
These fees can be a barrier to adoption. The switch to an EV may have long-term cost-savings and be more cost stable compared to gasoline-powered vehicles. But the upfront costs are overwhelming. The one-time fees and annual extras add to the initial shock of EV pricing. The Ford F-150 Lightning electric pickup truck starts at just under $60,000 while the original, gas-based F-150 truck starts at just over $34,000.
Somewhat ironically, EV pioneer Tesla moved its headquarters to Austin, Texas. Its cheapest EV, the Model 3, starts at over $40,000. Tesla’s Model 3 and Y are eligible for a federal tax credit up to $7,500 for certain drivers.