Driving an electric car in Texas? That’ll be $200 extra

08 May 2023

The state house of Texas voted through a bill that will slap EV owners with a $200 tax. As you can imagine, this is a highly controversial situation with both sides of the argument having some valid points. On one hand, the flat $200 fee feels like a penalty for owning an electric car but on the other hand - with a growing number of EVs on the road, the government needs to raise funds for improved infrastructure.

The bill has been voted through without a single vote against it, at 145-0 that’s a firm yes from the Texan politicians. Vehicle tax is nothing new but forever it has been included in the price of gas. Using more gas meant paying more tax and the state of Texas collected as much as nearly 30% of its highway funds from the gas tax each year. With the advent of electric cars, the situation started to change.

More electric cars on the road mean less fuel used, which simply resulted in fewer taxes and less money for infrastructure repairs. And at the same time - more cars using the roads. It was just a question of time before the legislature realized that balancing books gets tricky with more and more EVs on the road.

Texas has one of the lowest gas tax levels in the country, it was set at $0.20 per gallon back in 1991 and it hasn’t changed since. The tax applies to all kinds of fuel - gasoline, diesel, jet fuel, and general aviation fuel as well. With the new emissions regulations and electric car sales targets for the next few years, every state has to look closely at replacing the fuel tax with other ways to pay for highway infrastructure maintenance.

The issue with the $200 Texan tax is that it’s significantly higher than the same tax applied in California. The Golden State charges EV owners $108 which is much easier to accept. Working out the actual fuel tax paid by a gas-powered car’s owner suggests that an average driver (15,000 miles per year) pays $180 every year but only about half of that goes to the state of Texas, the other half goes to Washington D.C.

So, if the yearly gas tax is $90 for an ICE car, the $200 tax for an electric car feels almost like a penalty. On the other hand, though, Texas needs a lot of new infrastructure to support the growing EV fleet and that money has to come from somewhere. The White House designated $621 million for new roads, public transport, bridges, and EV infrastructure and it sounds like a lot of money. That’s until you learn that according to the American Society of Engineers, the US needs $2.6 trillion to upgrade its infrastructure in time to meet the looming emissions targets.

Via