Texas Implements EV-Only Tax To Level The Field With Combustion

Government / 17 Comments

The $200 yearly tax has been signed into law.

The Texas gas tax that everyone knew was going to pass passed this past weekend as Governor Greg Abbott signed it into law, according to the Dallas Morning News. The new law will go into effect on September 1 and institute more expensive taxes than previously thought. After that date, anyone who purchases a fully electric vehicle - not a hybrid - will have to pay a $400 initial tax on top of the normal taxes and then a $200 yearly tax thereafter.

The goal of the tax, which passed the Texas House with unanimous bipartisan 145-0 support, is to make sure electric vehicles are paying toward the state highway fund the same way ICE vehicles do with the 20-cent gas tax. While on paper, the tax makes sense, there have been those that have criticized the proposed EV tax as too expensive, even going as far as calling it a new hurdle toward mass EV adoption.

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One thing to keep in mind is that out of the 22 million registered vehicles on Texas roads, only a measly 200,000 of them are EVs. 30,000 of those were added in just the last year, but it's going to be a few years before they truly compare to their ICE counterparts. To that point, the state believes this tax will produce an extra $38 million toward the fund yearly; a significant sum until you realize ICE vehicles produce $3.8 billion yearly towards the fund.

Even though the numbers are small, this may be one of the rare circumstances where the government has gotten out in front of something before it becomes an issue. In five years, when EVs on Texan roads have doubled, tripled, or even quadrupled, people will be glad EVs are paying their fair share. But is the share fair? As we've pondered before, is $200 too much? Or is it even too little?

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On average, a vehicle contributes $130 towards the Texas gas tax each year, a significant discount compared to the $200 fee. While debating the bill, some lawmakers proposed a tiered system, with lighter-weight electric vehicles only having to pay $100 a year instead. Of course, the proposal was defeated, but there is something to the idea of taking into real consideration just how heavy some EVs can be and how they can impact our infrastructure.

Take the 9,000-pound Hummer EV Pickup, for example. This vehicle's impact on adding wear and tear to our infrastructure will be much more significant than something like a Nissan Leaf. The debate extends beyond roads, too, meaning our country will soon have a reckoning when our vehicles become too heavy for parking lots and other structures, potentially causing them to collapse.

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