Electric car owners are freeloaders who skirt around the gas taxes that pay for the upkeep of America’s roads and highways—all while using that infrastructure just as much as anyone else. That’s what some people think, but a new study suggests that isn’t entirely true.

Atlas Public Policy, a policy and data research firm, crunched the numbers and concluded basically the opposite. Between registration fees targeted at EV buyers and taxes levied at charging stations, the firm found, EV owners in a majority of U.S. states could very well end up forking over more to the government annually than drivers of internal combustion-engine cars. 

Get Fully Charged

The road funding gap

EV drivers don't pay the gas taxes that help fund infrastructure like roads and bridges. Research shows that EV-specific registration fees and charging taxes that attempt to bridge that gap may have gone too far.

The firm found that in 36 states, including Washington, D.C., electric car drivers who exclusively charge their vehicles at public fast-charging stations pay an “EV Penalty.” That means they’re charged more in various taxes and fees than an average gas-car driver pays in fuel taxes each year. 

Utah has the highest penalty: a whopping $368.76 annually. Georgia is No. 2 at $325.61. Kentucky ranks third, with $260.33. In all, 16 states have a penalty higher than $150. Here’s the top 10:

State EV Penalty
Utah $368.76
Georgia $325.61
Kentucky $260.23
Tennessee $235.03
Alabama $234.77
Mississippi $222.40
West Virginia $209.26
Texas $201.71
Oklahoma $188.72
North Carolina $185.54

The lowest EV penalty was found in Oregon. Even after a $90 registration fee, EV owners there pay $119.49 less in taxes and fees annually than gas-car drivers. 

In an attempt to make up for lost revenue from gas taxes, lots of states ask EV owners to pay extra in yearly registration fees. That ranges from $50 in Hawaii to $225 in Washington, according to Atlas Public Policy. The bigger problem, the firm argues, is that charging is often subject to multiple overlapping, opaque taxes that unfairly jack up EV ownership costs. There are sometimes per-kilowatt-hour taxes on energy dispensed along with regular-old sales taxes, for example.

“Currently, there is no structure to prevent the overlapping of these fees, so EV drivers may be subject to a double, triple, or a quadruple tax depending on what state they reside in and where they charge,” the firm said in its report. “Meanwhile gasoline drivers are only subject to the gasoline tax and are generally exempt from sales or other taxes.”

A caveat: The typical EV owner doesn’t exclusively use fast charging stations. A majority of them charge at home most of the time. Moe Khatib, the study’s author, told InsideEVs that drivers who charge at home would likely pay less in fees and taxes annually than gas-car drivers in their state. 

Get the InsideEVs Newsletter
Sign Up Today

Still, the findings highlight an equity problem. A growing portion of new EV buyers don’t have the luxury of charging in a garage or driveway. So the way things are structured now essentially penalizes people for living in places where they need to park on the street. Public EV charging needs to be palatable for the next wave of EV adopters. 

And at a time when electric cars already cost more upfront than gasoline equivalents, the widespread “EV Penalty” may give buyers on the fence yet another reason to stick with gas. According to the market research firm Strategic Vision, 12% of U.S. car owners say EV registration fees are a barrier to going electric. And 34% cite overall cost of ownership as a hurdle. 

Atlas Public Policy says taxes and fees for EV owners should be rightsized and made more transparent—particularly as EV sales grow to new heights each year. That makes sense. For the EV movement to truly become mainstream, people can't feel like they're paying a premium to participate. 

Contact the author: tim.levin@insideevs.com

Got a tip for us? Email: tips@insideevs.com