Proposed Electric Vehicle Fees Would Only Make Life Less Affordable for Americans

As the country heads into summer driving season, gas prices stand at more than $4.50 per gallon. At those prices, Americans will spend more than $213 billion on gasoline between May and August 2026—roughly $59 billion more than they spent in the same time frame last year, provided historical trends hold. And hold they probably will, as decades of transportation policy prioritizing highway expansion over transit and walkable communities have left most Americans with few alternatives to gas-powered cars and trucks, leading to widespread dependence on gasoline for mobility.

Electric vehicles (EVs) offer an alternative that reduces costs and avoids exposing Americans to dramatic fluctuations in the price of oil. However, instead of prioritizing this alternative, some members of Congress—on the heels of the Trump administration’s assault on EVs—are pursuing policies that would make EVs more expensive, all in the name of patching a funding hole in the Highway Trust Fund (HTF) that, in reality, has very little to do with EVs.

EVs deliver enormous cost savings

Transportation is the second-highest category of household spending after housing, making up roughly 17 percent of household spending in 2024. Of this spending, almost 20 percent goes toward gasoline.

EVs—not relying on gasoline—can deliver significant cost savings. Most EVs easily achieve more than 100 miles per gallon equivalent, based on the assumption that 33.7 kilowatt hours (kWh) is equivalent to the energy content of one gallon of gas. Based on an average residential electricity cost of $0.1765 per kWh and fleetwide gasoline vehicle efficiency of 28.1 mpg, EVs cost roughly $1.67 per “gallon” to fuel. Due to having fewer moving parts, EVs also generally cost less to maintain. Combined, these features could save EV drivers up to $2,200 per year, an especially meaningful difference for lower-income households. According to 2024 data from the U.S. Department of Transportation, Americans in the lowest income quintile spend 30.6 percent of their pretax income on transportation, compared with 9.6 percent for those in the top income quintile.

With gasoline prices surging amid the Trump administration’s war in Iran, interest in EVs has spiked significantly. And with EV prices continuing to fall, more Americans will soon have access to gasoline-independent transportation.

Proposed fees would saddle EV drivers—and buyers—with huge costs

Unfortunately for Americans who might be interested in buying or leasing an EV, House Transportation and Infrastructure Committee Chair Sam Graves (R-MO) has indicated a desire to impose a new tax or fee on EV drivers in his committee’s upcoming surface transportation bill. Two existing proposals for EV fees include a $250 annual registration fee ($100 for hybrids) and a $1,000 tax levied on manufacturers at the time of sale. Notably, $250 is more than twice what drivers of the average gasoline-powered vehicle pay in federal gasoline taxes, and the fee would be retroactive, applying to Americans who bought their EVs years ago. Moreover, it would stack on top of the disproportionately high fees already charged to EV drivers in many states. The chairman has stated that fees currently being discussed in negotiations are lower, but he has not provided specific numbers.

These proposed fees would not just increase costs for those who have or plan to purchase an EV; they would also prevent many Americans from doing so, forcing them to continue to rely on gasoline and be subject to its volatile prices. Modeling shows that, combined, the fees would result in 7.3 million fewer EV sales by 2045. That is 7.3 million drivers denied the opportunity to escape burdensome gas prices.

EV fees would do little to stabilize the Highway Trust Fund

Federal EV fees have been proposed in the name of fixing a looming gap in the Highway Trust Fund (HTF), the primary funding mechanism for federal highway construction and mass transit. The reality, however, is that EVs are not the cause of the HTF’s looming insolvency, nor are they able to fix it. Since 2006, revenues into the HTF have fallen short of spending, largely due to ballooning construction costs and a gas tax disconnected from inflation.

An optimistic analysis of the proposed EV fees indicates that they would have raised $2.9 billion in 2025 had they been in effect, amounting to just 14.7 percent of the $19.7 billion difference between revenues and outlays the HTF ran that year. If only the annual registration fees were in place, revenues would decrease to $1.6 billion—just 8.1 percent of the HTF shortfall. And because any combination of the fees would drive down EV sales, future revenues would likely grow slowly. Proposing EV fees to make the HTF whole is grandstanding at best and serving oil and gas industry demands at worst.

If Congress really wants to address the problems with the HTF, it should start by implementing a vehicle-miles-traveled fee or increasing taxes on commercial vehicles, which do far more road damage due to weight and annual mileage. And if Congress, understandably, wants to avoid increasing costs further, it should consider reforming the HTF and federal-aid highway programs—for example, by limiting gas tax revenues to roadway repair, a cost those revenues may actually be sufficient to cover, and by requiring new roadways to be funded by new appropriations.

Conclusion

Beyond fixing the HTF, however, Congress has a bigger task: reimagining the nation’s transportation system. America’s transportation system has fallen significantly behind those of other developed economies, and surface transportation reauthorization—the legislative vehicle passed every five to 10 years through which most transportation policy is made—has largely become a stale process.

Chair Graves has indicated he wants the next surface transportation bill to be “traditional.” This is the wrong approach. The interstate highway system wasn’t traditional when it was built, nor was the national rail network that preceded it. Congress’ task should not be to plow more money into the old system but to build a new, world-class transportation system for the 21st century. This will require a radical rethink of what transportation in America should look like, and Congress’ time would be better spent working on that question than charging Americans for trying to escape sky-high gas prices.

The author would like to thank Jasia Smith, Steve Bonitatibus, Devon Lespier, and Sophie Conroy for their contributions to this article.

Methodology

The estimated cost to drive an EV an equivalent distance as a gasoline-powered vehicle on one gallon of gasoline is based on the author’s calculations using fuel economy data from the Environmental Protection Agency, average residential electricity prices from the Energy Information Administration, and a conservative estimate of EV miles per gallon equivalent (MPGe) based on data from Kelly Blue Book. The average combustion-engine fuel economy of 28.1 mpg was multiplied by a conservative average of 0.337 kWh per mile EV efficiency and the average residential cost of electricity, $0.1765 per kWh, to arrive at the cost of driving an EV the same distance as a combustion-engine vehicle on a gallon of gasoline.

The estimated increase in gasoline expenses between May and August is based on the author’s calculation of historical gasoline price and consumption data from the Energy Information Administration and current national average gasoline prices from AAA. Average monthly gasoline consumption was calculated for May through August 2020 through 2025 to establish recent summer consumption trends. This level of consumption was then multiplied by 4 1/2 to estimate consumer expenditures on gasoline at a cost of $4.50 per gallon.

The estimated decrease in EV sales was based on a $250 annual fee and a one-time $1,000 point-of-sale fee for electric vehicles.

The estimated increase in HTF 2025 revenue had the fees been in place is based on the author’s calculation of 2024 EV registration data from the Department of Energy, 2025 EV sales data from Argonne National Laboratory, and HTF account estimations from the Congressional Budget Office. 2025 sales of EVs and plug-in EVs (PHEVs) were added to existing 2024 registration data for EVs and PHEVs and then multiplied by $250 and $100, respectively. 2025 EV sales were also multiplied by $1,000 to account for the point-of-sale fee, then added to the result of the preceding calculation to arrive at the total hypothetical revenue from the fees had they been in place in 2025.