Gov. Greg Abbott signs electric vehicle fee into law

KHOU11
Author: Isabella Basco, KVUE Staff
Published: 6:58 AM CDT May 16, 2023
Updated: 6:33 PM CDT May 17, 2023

AUSTIN, Texas — On Saturday, Gov. Greg Abbott signed an electric vehicle fee into law.

Senate Bill 505 requires electric vehicle owners to pay $400 to register a new electric vehicle, on top of other fees. Renewing registration will cost $200.

The new fee does not apply to electric motorcycles, mopeds or autocycles.

The fee is intended to ensure that electric vehicle owners pay their fare share toward highway costs, which are usually covered by a 20 cent-per-gallon gas tax paid by owners of gas-fueled and hybrid vehicles.

Tesla driver August Worley fears the new legislation could drive car owners backwards. 

"It's kind of an annoyance," Worley said 

According to a report from the Dallas Morning News, Texas has nearly 200,000 electric vehicles in the state. More than 30,000 new electric vehicles have been added to the roads just this year.

The report states that the average owner of a gas-fueled vehicle pays approximately $130 in state gas taxes per year. Both that tax and the new electric vehicle fee are dedicated to the state highway fund, though some revenue is also diverted to schools, according to the report. 

UT Austin Transportation Engineering Professor Kara Kockelman thinks it sends the message that Texas is "fully behind oil and gas." 

"Electric vehicles should pay a gas tax, I just think the tax on the conventional cars should be much, much higher than it is. We pay less for gas in this state than almost anyone in the world, and that includes India and China where there is a great deal of poverty," Kockelman said. "Texas is really behind the curve on trying to do the right thing by the environment, and so that's embarrassing I think for all of us. But it isn't really a lot of money. In fact, owning and operating an electric vehicle, especially an all-electric vehicle is incredibly cost saving."

The report states that the new electric vehicle fee will funnel at least $38 million in new money to the state highway fund, while gas and diesel taxes will generate an estimated $3.8 billion in revenue for Texas in 2024.

The new electric vehicle fee goes into effect on Sept. 1.