Proposed $500 Annual EV Tax: A Step Backward for American Families

Congressional Republicans have introduced a proposal to impose a $500 annual tax on electric vehicles (EVs). That’s five times more than what the average gasoline-powered vehicle driver pays in federal gas taxes. Claimed as a way to fund road infrastructure, this proposal isn’t just misguided—it unfairly targets EV drivers and harms everyday Americans.

Consumer Reports’ analysis highlights the unfairness: an average gasoline-powered vehicle driver pays just $89 per year in federal gas taxes. This tax doesn’t level the playing field—it tilts it sharply against EV drivers, penalizing those who’ve chosen more affordable, cleaner, and more efficient transportation.

Coltura’s own EV Cost Savings Index underscores the substantial savings EV drivers achieve by switching from gasoline. Families driving EVs save an average of $1,117 on fuel and maintenance. Introducing a steep $500 tax would erase nearly half of those savings, disproportionately hurting the very communities who stand to benefit most from EVs: rural residents, long-distance commuters, and working families already stretched thin by rising costs.

This $500 tax doesn't just penalize current EV drivers—it slows EV adoption, keeping more families trapped in costly gasoline dependence. A study conducted by the University of California, Davis, found that imposing a $100 annual EV registration tax would reduce sales by as much as 20%. The proposed $500 federal tax would harm both consumers and economic growth linked to American leadership in EV manufacturing, infrastructure, and innovation.

We believe road infrastructure funding is essential—but it must be equitable. Penalizing EV drivers, who already contribute significantly through state license taxes and electricity taxes, is not the solution.

If you're an EV driver—or if you care about affordable clean transportation—contact your representatives. Let your congressional representatives know you oppose this unfair tax. A better and more affordable transportation future depends on policies that incentivize money-saving choices.