The EV Tax Bill: A Roadblock Disguised as Reform
By John Higham, EVA Board Member
Imagine you’re at a restaurant. The people at the table next to you order the most expensive meal on the menu—steak, lobster, fine wine. They eat to their heart’s content and then, when the bill arrives, they hand it to you. That’s what two proposed EV tax bills are like.
Let’s break it down.
Right now, every gallon of gas comes with an 18.4-cent federal tax. That number hasn’t changed since 1993.
If Congress had adjusted it for inflation, the federal gas tax would be 40.1 cents today.
But wait—cars are significantly more fuel-efficient than they were in 1993. If we also adjust for the fact that modern vehicles travel much farther on a gallon of gas, the Congress should have raised the federal gas tax to 79.5 cents a gallon.
But instead of addressing this outdated tax, Senator Deb Fischer, R-Nebraska, proposes slapping EV buyers with a one-time $1,000 penalty. Let’s be clear—this does little to fund road repairs. About 9 percent of all cars and trucks sold in the United States in 2024 were electric. So assessing an extra tax on EVs is a cash grab intended to punish EV drivers. Congress continues to fail to address the real issue: the country needs a new way to pay for our roads.
The Electric Vehicle Association and our volunteer members, who own electric cars and trucks, believe EV owners should pay their fair share. We fully support a modernized road tax that spreads the responsibility equally among drivers of all types of vehicles regardless of whether they are powered by gasoline or diesel fuel, or electricity.
Here’s what that would look like:
Congress should increase the outdated 18.4-cent per gallon gas tax to 79.5 cents per gallon, with automatic adjustments for inflation and vehicle fuel economy improvements.
Congress should also Implement an annual EV tax equivalent to the amount the owner of a gas-powered car pays, assuming 15,000 miles driven per year, collected during state vehicle registration.
Senator Fischer’s bill would charge the EV tax when the electric vehicle is sold. She estimates $1,000 is the amount of gas tax that would be paid over 10 years for a gas car. That’s unfair because the federal government doesn’t charge the gas tax in advance. Drivers pay it at the pump each time they refuel their conventional car or truck.
That’s a fair, reasonable approach. But fairness isn’t the point.
In addition to the $1,000 EV tax, Senator John Barrasso, R-Wyoming, wants to eliminate the $7,500 tax credit for EVs—a credit that was specifically designed to ensure America remains competitive in the rapidly evolving global auto market.
The Inflation Reduction Act (IRA) tied this credit to American-made EVs. It’s a jobs policy as much as it is a climate policy. Auto manufacturers have made massive investments in U.S. manufacturing based on the stability of this incentive. Eliminate it, and the Congress is not just hurting EV buyers—our senators and representatives are slashing jobs, undermining American businesses, and surrendering our position in the global auto market.
Let’s also talk about fairness in the broader energy economy. Gasoline prices in the U.S. are artificially low thanks to generous subsidies for oil companies. The U.S. federal and state governments give the fossil fuel industry more than $20.5 billion in support each year through the tax code, royalty rates, and direct funding.
If we’re serious about fiscal responsibility, why aren’t we addressing those subsidies instead of targeting a tax credit that supports American industry and innovation? The rest of the world is investing in electric cars and trucks. Why does Congress not want America to be among the leaders in the transportation future?
The EVA stands for policies that make sense—not knee-jerk reactions that do more harm than good. If we want sustainable road funding, let’s update the gas tax and create a proportional system for EVs. If we want a strong economy, let’s support American manufacturing, not sabotage it.
Senator Barrasso and Fischer’s bills aren't about fairness. They are roadblocks, not solutions.