EV drivers in Texas to cough up more money for registration fees

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Later this year Texas will begin charging extra registration fees for electric vehicles in lieu of motor fuel taxes that support the construction and maintenance of highways in the Lone Star State.

            The Texas Legislature passed and Gov. Greg Abbott signed Senate Bill 505, which will impose an annual $200 fee for the registration or renewal of an electric vehicle and a $400 fee for the registration of a new electric vehicle. Apparently the new fees will be in addition to a vehicle’s existing registration fees.

The new law goes into effect Sept. 1 reported Mike W. Ray of the Southwest Ledger.

The statute defines an electric vehicle as a motor vehicle that has a gross weight of 10,000 or fewer pounds and “uses electricity as its only source of motor power.” The fee will not apply to autocycles, motorcycles, mopeds, nor neighborhood electric vehicles.

A “neighborhood electric vehicle” is defined in state law as one that can attain a maximum speed of 35 miles per hour on a paved level surface. An “autocycle” is defined as a motor vehicle “other than a tractor” that is designed to have no more than three wheels on the ground when propelled.

Revenue from the new fees must be deposited “to the credit of the state highway fund.”

Based on an analysis provided by the state Comptroller’s office and the Texas Department of Motor vehicles, “it is assumed the additional fees would apply to approximately 105,800” currently registered electric vehicles in the state.

It is believed the new fees will generate $79.5 million for the Highway Fund starting in fiscal year 2024. The number of vehicles and associated revenue gains will increase each fiscal year “based on industry and market forecasts used by the Comptroller.”

Texas collects a fuel tax of 20 cents per gallon on both gasoline and diesel, a levy that was established in 1991, according to Texas A&M University. Three-quarters of the fuel tax (15 cents) is deposited in the Highway Fund and 25% (a nickel) is earmarked for public education.

It is assumed the Texas DMV will incur one-time costs of $214,440 in information technology expenses in FY 2024 for programming changes to the department’s automated systems to implement the provisions of SB 505.

The bill passed both houses of the Texas Legislature without a dissenting vote.

Tesla’s Gigafactory Texas is located in Del Valle, which is part of the Austin – Round Rock – San Marcos Metropolitan Statistical Area. Austin is the company’s U.S. manufacturing hub for its Model Y and the company’s global headquarters.