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Engadget
02-07-2025
- Automotive
- Engadget
Trump's 'Big, Beautiful Bill' is bad for American EVs, but it could have been worse
President Trump's " Big Beautiful Bill " has squeaked through the Senate in time for this weekend's pyrotechnic celebrations. The bill festively shoots down a long list of environmental protection measures of all shapes and sizes, with the red glare of those rockets looking set to burn all current federal EV rebates in particular. While the exact timing is still in flux, as things stand the $7,500 federal rebate for electric vehicles would expire not in 2032 as originally specified, but as soon as the end of September. It's an abrupt, ignominious end to a series of incentives that, in some form or another, dates back to the George W. Bush administration. This change doesn't just cover new consumer vehicles, like the Kia EV9 or Volkswagen . It also eliminates the $4,000 federal credit on used EVs, and even stands to kill rebates for commercial vehicles of the sort that inspired a whole new and weird generation of electric vans like those from Rivian and Arrival (RIP). All those initiatives were meant to drive down the environmental impact of a transport industry that, combined, makes up 29 percent of total US greenhouse gas emissions . While that unfortunate environmental impact might not be immediately felt, for anyone considering buying an EV, some pain in the wallet is coming much sooner. But it could have been worse. Earlier versions of the bill imposed a $250 annual fee for EV owners, and a still-spiteful $100 for hybrid owners. That fee would go into effect regardless of when you bought your wheels, so even if you were doing the electric thing before it was cool , you'd have been stuck with a substantial annual premium. That fee was to be directed to the Highway Trust Fund, ostensibly ensuring that EV owners are paying their fair share for federal transportation infrastructure maintenance. The bulk of that funding comes from an 18.4 cents per-gallon tax on gasoline, which imprecisely ensures that drivers are paying roughly their fair share for highway use. This supposed attempt at EV equivalence, however, was structured in a wildly disproportionate way. The average American drives 11,318 miles per year, according to the Department of Energy, which works out to just under $100 annually in taxes on gasoline. That's less than half the proposed annual fee for EVs. Yes, electric cars and their heavy batteries do indeed wear out roads more quickly , but not to that degree. That felt more than a little unfair, but lawmakers faced an even bigger roadblock: They literally couldn't make such a fee structure work. "There is no mechanism today for the federal government to collect an annual fee," Ohio Republican Senator Bernie Moreno told Politico . Regardless of the reasoning, for now at least, this fee is no longer part of the bill. American EV sales haven't exactly been following the hockey stick growth that most industry experts had formerly been projecting. Still, it has been steadily trending upward. American EV sales in the first quarter of this year were up 10 percent, according to Cox Automotive , and that's despite Tesla's precipitous slide of late. Considering the average cost of a new car in the US is $48,799, and the average cost of a new EV is $57,734, that $7,500 federal EV tax credit clearly makes a substantial difference in bridging that gap. Assuming the Big Bill passes, that bridge will be demolished in just a few months time. While it's impossible to say how much the American EV market's growth has been driven by those incentives, we can look at the impact such cuts have had in other markets. Germany's Climate and Transformation Fund paid out €10 billion between 2016 and 2023, chipping in towards the purchase of 2.1 million EVs. EV sales declined in Germany by 16.4 percent through the first half of 2024 after that program ended. Meanwhile, elsewhere in Europe, EV sales continued to grow by nearly 10 percent. It's looking like it was only a temporary setback, though. In the first five months of this year, German EV registrations are up more than 40 percent . That, again, is despite Tesla's particularly steep decline there . As to which manufacturers will be most impacted, it stands to reason that buyers looking for with lower-priced EV offerings — cars from brands like Hyundai, Kia and Nissan — will take this change the hardest; buyers of premium brands — like Mercedes-Benz, BMW and Porsche — will be a little less dissuaded. Regardless, it should come as no surprise that not a single vehicle manufacturer is found in the list of endorsements for the "Big Beautiful Bill." You will, however, find a who's who of players in the petrochemical world, like the American Petroleum Institute, Chevron, ConocoPhillips and Coterra. The bill won't just kill incentives for EV buyers or leasers. America's charging infrastructure is also set to take a hit thanks to the repeal of the Alternative Fuel Vehicle Refueling Property Credit. This covered up to 30 percent of the cost of EV charger installation, encouraging more businesses to put more chargers in more places. Deleting that credit certainly won't help the stubbornly slow buildout of America's charging infrastructure. Critics of the American federal credit program have long said that it was too frequently used by wealthy buyers to chip a little off the cost of their next luxury EV. That, at least, is being addressed in one of the bill's other transportation-related changes, something that could actually be a positive for many Americans. The bill includes a new tax deduction that could help modern shoppers saddled with debt after a car purchase. If passed, the bill would allow buyers with car or motorcycle loans to claim up to $10,000 in interest per year on their taxes. This applies to vehicles regardless of propulsion type, meaning EVs and hybrids qualify, but there are plenty of other criteria, including that the vehicle must be for personal use, cannot have a salvage title, and must have undergone final assembly in the United States. Beyond that, to claim the full deduction, individuals must have an adjusted gross income (AGI) of less than $150,000 if filing as an individual, or $250,000 for a married couple filing jointly. If you're a shopper who's been on the fence about buying an EV, it's safe to say that now would be a very good time to pull the trigger. And I do mean now. The federal rebate may carry through September, but extra dealer incentives will be drying up quicker than crocodile tears. If, on the other hand, you're a manufacturer of EVs, chances are there's not a lot you can do right now. The auto industry was not designed to react to the whims of our current presidential administration and the gasoline-loving special interests that fuel it. Hopefully, the success of your business wasn't tied to the continued existence of federal incentives — or, indeed, a lack of import tariffs . Going forward, American EV offerings will need to be one of two things: Priced on par with the internal combustion competition, or so fundamentally compelling that they're worth the extra cost. If your vehicles don't meet that criteria, come October you might have a problem.
E&E News
30-06-2025
- Automotive
- E&E News
EV fees are out of the budget bill — but they'll be back
The push to impose fees on electric vehicles appears to be dead in the Republicans' megabill, but it's likely to be a central topic when lawmakers start writing the next surface transportation bill. Republicans in both the House and Senate say it's important for electric vehicles — and hybrids — to pay into the federal Highway Trust Fund. A big question is how. Many Democrats and EV advocates have come to accept there will be some kind of fee on the new breed of cars and trucks, although they argue that some of the Republican proposals amount to overkill. Advertisement 'Fixing the HTF is long overdue, and Congress must tackle this growing problem,' House Transportation and Infrastructure Chair Sam Graves (R-Mo.) wrote last week in a Washington Times op-ed.
Miami Herald
24-05-2025
- Automotive
- Miami Herald
Got an EV? You Might Be Paying New Hidden Fees, Thanks to Congress
If you have listened to the evening news this week, you probably would have known that the U.S. House of Representatives passed the "One Big Beautiful Bill Act" early on Thursday, May 22, right before lawmakers are set to return to their districts. The "beautiful" bill has already drawn a lot of attention due to landmark measures packed into the document, including significant tax reform based on major cuts, Medicaid and SNAP reform, increased immigration spending, and an increase to the national debt ceiling, to name just a few. However, packed into the text of the nearly 1,000-page bill are some measures that will affect American motorists, especially those who seek to free themselves from the crutch of the gas pump. Hidden very deep in the bill's text is an amendment titled Section 10004, or "REGISTRATION FEE ON MOTOR VEHICLES." This amendment states that the federal government will impose annual registration fees of $250 for electric vehicles and $100 for hybrids, which individual states' motor vehicle departments will collect. Lawmakers like Rep. Sam Graves (R-Mo.), the chairman of the influential Transportation and Infrastructure Committee, said after the bill was passed that such a provision would help fund the Highway Trust Fund, the main source of federal highway funding. He argues that as EV ownership increases and drivers adopt more fuel-efficient cars and hybrids, the gas tax could lose its relevance very quickly. "The bill includes provisions from the Transportation and Infrastructure Committee to provide historic investments in the United States Coast Guard to strengthen our national and border security, as well as […] ensuring that electric vehicles begin contributing to the Highway Trust Fund," Graves said. The Highway Trust Fund is funded in part through the gas tax, which is reflected in the price of gasoline and diesel fuel. Currently, the gas tax is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel, a rate that has not been raised since October 1, 1993. Graves originally tabled this provision in the US House of Representatives Transportation and Infrastructure Committee in late April, where it passed and was added onto the "Big Beautiful Bill" after a 36-30 vote. Graves's proposal in the BBB will impose enforcement responsibility on the states. Specifically, states will be charged 25% on top of the calculated amount of funding they were expected to bring into the Highway Trust Fund if their motor vehicles departments do not collect the respective EV and hybrid fees. "The Administrator shall withhold, from amounts required to be apportioned to any State under section 104(b), an amount equal to 125 percent to the amount required to be remitted under subsection (c)(2)," the bill says. "The Administrator shall withhold the amount on the first day of each fiscal year beginning after September 30, 2026, in which the State does not meet the requirements of subsection (c)." This is not the first time that congressional lawmakers have proposed some sort of "fairness" fee targeted at EV owners. In February 2025, Senator Deb Fischer (R-NE) introduced the Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE) Act, which would add a $1000 fee to EVs at the time of purchase, aimed at recouping around 10 years' worth of federal gas tax revenue per car. However, it should be noted that this sort of doctrine has already been enforced at the state level. According to the National Conference of State Legislatures (NCSL), 39 states have a special registration fee for EVs to recuperate lost gas tax funding. For example, EV drivers in New Jersey, which has reached nearly 200,000 strong as of December 2024, will have to pay a $250 annual electric vehicle fee in addition to their registration fee. This fee will increase by $10 per year for four years and exceed $290 starting in 2028. New Jersey's yearly EV registration tax proceeds will fund the state's trust fund for transportation projects and NJ Transit. It should be noted that this provision affecting EV and Hybrid drivers is sandwiched in the BBB along with dozens of other amendments affecting critical programs such as Medicaid and SNAP, as well as raising the debt ceiling. According to Politico, several Republican Senators say they'll be making changes to the BBB, as many of the provisions could affect constituents in their states. Politics aside, looking at the numbers, it is easy to see how the shift from traditional to alternative fuels could upend decades-old rules and legislation, especially regarding the gas tax and the Highway Trust Fund. However, finding a straight-line solution will require a lot of time, work, and understanding of EVs and the needs of EV buyers by our leaders. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
E&E News
23-05-2025
- Automotive
- E&E News
New EV fees won't fix highway funding problems — and could ding transit
Electric vehicle and hybrid car fees included in the Republicans' sprawling party-line bill would be the first new revenue dedicated to the Highway Trust Fund in 30 years. But there's a catch, experts and lawmakers say. The fees would go only part of the way toward closing the fund's massive spending gap. And, as currently written, the legislation would direct the money only to highway projects, to the exclusion of transit. Historically, 80 percent of the fund's money has gone to highways and 20 percent to transit. Advertisement Republicans — and the construction industry — are optimistic about securing a long-term solution to pay for the nation's aging roads. But public transportation advocates and some Democrats are worried that buses, rail and ferries will be left at the station.
Auto Blog
06-05-2025
- Automotive
- Auto Blog
New Federal EV Fee Could Cost Owners More Than Twice the Average Gas Tax
A new bill could put a dent in EV drivers' savings Transportation and Infrastructure Committee Chair Sam Graves, who is also a Congressman representing the 6th District of Missouri, has proposed a federal bill that would require electric vehicle (EV) drivers to pay a yearly registration fee of $250 and hybrid owners to cough up $100 annually, according to Reuters. The suggested annual EV registration fee, which essentially operates as a tax, is based on a Federal Highway Administration estimation that the average American uses about 550 gallons of gas per year, according to InsideEVs. However, the current federal gas tax is 18.4 cents per gallon, which comes out to about $101 when multiplied by 550, so there's a significant discrepancy with the fee for all-electric models, even if you go with the bill's initial suggestion of charging electric car owners $200 yearly. In other words, if the bill passes, EV owners would be paying an annual registration fee more than twice the average gas tax or the equivalent of the $0.184 tax on 1,389 gallons of gasoline. A proposed $20 annual fee for all drivers that was part of the bill was dropped. Porsche Taycan — Source: Porsche The bill suggests that the $250 EV and $100 hybrid registration fees would generate around $40 billion over the next decade for the Highway Trust Fund (HTF), which pays for a variety of transportation infrastructure projects, Benzinga reports. 'By leveraging states' existing registration systems, the bill assesses an annual registration fee of $250 on EVs and $100 on hybrids (which currently pay a lesser share into the HTF) to ensure they pay for their use of the nation's roads and bridges. Together, these new user fees are expected to increase federal revenues by a conservative estimate of more than $38B over 10 years, all of which will be deposited into the HTF,' Transportation and Infrastructure Committee Chair Sam Graves said in an interview with Design News. Consumer Reports notes that seniors, who drive far fewer miles than the average American, would have to pay almost six times the amount of driving the average new car getting 28 MPG. While hybrid owners wouldn't pay as much as EV owners, they would still face an annual fee roughly twice the amount they would pay in federal vehicle gas taxes when driving a less fuel-efficient internal combustion engine (ICE) model. Seniors driving hybrids would have a yearly fee three times that of a gas-powered car. The Transportation and Infrastructure Committee's bill also includes inflation adjustments for the annual EV and hybrid fee but doesn't include inflation adjustments for ICE vehicles. The committee reviewed the bill on Wednesday before it heads to the House Budget Committee. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Final thoughts The Transportation and Infrastructure Committee is right to consider changes to fuel taxes, which haven't been updated since 1993, considering that funding for the Highway Trust Fund has declined since around 2008. Just in 2024, the fund faced a deficit of $20.6 billion. While fuel tax revenues haven't been keeping pace with the increased adoptions of EVs, the revenues haven't experienced any adjustments for inflation, and EV owners appear to be picking up all the slack. EV drivers will also have to pay this significantly higher $250 fee upfront at registration instead of incrementally, like ICE owners would.
