New Texas State Law Mandates Extra Fees for Owning Electric Vehicles Starting September 1st

close up shot of an electro vehicle charging port

Owning an electric vehicle comes with the expectation that you're going to save money on car costs since you no longer have to pay for gasoline. 

The issue with this is that when car owners aren't purchasing gas, there is a direct decrease in the amount of money the state makes on gasoline tax. The gas tax goes into a fund that goes toward state road construction and maintenance, and if everyone switches to EVs, that fund will dissipate quickly. 

New Registration Fees for Electric Vehicles 

Texas' solution is to charge electric vehicle owners extra on their vehicle registration each year. Lawmakers made this official when they passed Senate Bill 505 to ensure EV owners pay their fair share.

So, starting September 1st, 2023, registering your EV with the DMV will cost an extra $200 on top of standard car registration costs. 

In addition, new EV owners will be required to pay two years' worth of fees upfront, totaling $400 for their first year of registration.

How Did They Calculate This $200 Extra Fee?

But is this fee fair? Many drivers have mixed feelings about this, so let's break it all down: 

According to a 2020 report from the Texas DMV, the state loses an average of $200 annually on each gas-powered vehicle that an EV replaces. The only way drivers currently pay into this road maintenance fund is through gasoline tax, and ComplyIQ reports that the gas tax in Texas is 20 cents per gallon. 

Since EV drivers are still using the roads, it makes sense that they would pay into this fund some other way. It may initially seem unfair to charge EV owners an additional fee, but the math on their report checks out. 

If you're in Texas and considering upgrading to a new EV, just be sure to budget this additional $400 registration fee into your total cost of car ownership so you won't be surprised when the bill comes.