Congress proposes $130 annual EV fee starting in 2026

The United States Congress is advancing legislation that could reshape the financial landscape for electric vehicle (EV) owners. The proposed Building Unrivaled Infrastructure and Long-term Development for America’s 250th Act—commonly referred to as the BUILD America 250 Act—includes a federal registration fee for EVs, with the goal of ensuring these vehicles contribute to road maintenance funding.

The bill, introduced by the House Transportation and Infrastructure Committee, suggests an annual fee of $130 for EV owners, beginning in 2026. Plug-in hybrids (PHEVs) would face a lower initial fee of $35 per year. Both fees are set to increase incrementally: EVs would see their annual cost rise by $5 each year until reaching $150 in 2029, while PHEV fees would climb to $50 by the same year. The bill’s supporters argue that these fees align with the principle of "paying your fair share" for road usage.

How the proposed fees compare to gas tax revenue

The rationale behind the fees stems from a longstanding debate about road funding. Traditional gasoline- and diesel-powered vehicles contribute to road maintenance through fuel taxes, which are embedded in the price of gasoline. However, EVs do not consume gasoline, meaning their owners currently pay little to no direct tax toward infrastructure upkeep.

Under the new proposal, the federal government would collect these fees through state departments of transportation. If a state fails to enforce the federal EV tax, the government would deduct an equivalent amount from the state’s highway funding—calculated as 125% of the uncollected fees. This mechanism is designed to incentivize compliance while ensuring consistent revenue collection.

Bipartisan support and expected impacts

The bill has garnered bipartisan backing, including from committee chairperson Sam Graves (R-Mo.), who emphasized the historic nature of the infrastructure investments involved. Graves stated, "I’m extremely proud of the historic level of investment in America’s bridges—at more than $50 billion, it’s the largest such investment in our history. And the BUILD America 250 Act ensures that electric vehicle owners begin paying their fair share for the use of our roads."

While the bill’s sponsors highlight its potential to generate revenue for infrastructure projects, critics argue that the fees could discourage EV adoption, particularly as automakers and policymakers push toward broader electrification. The annual cost may also disproportionately affect lower-income drivers who have transitioned to EVs for long-term savings on fuel and maintenance.

What EV owners should do next

If the bill clears both chambers of Congress and receives presidential approval, EV and PHEV owners would need to account for the new fees in their annual budgets. States would likely integrate the federal fee into their existing registration processes, though specifics will depend on local regulations.

For now, the bill remains under consideration, with its future hinging on legislative negotiations. Stakeholders in the automotive and environmental sectors are closely monitoring the proposal, as its passage could set a precedent for how EVs are taxed in the coming decades. As the transportation sector evolves, policymakers face the challenge of balancing infrastructure funding with the broader push for sustainable mobility.