Washington Moves to Close EV Road Tax Loophole
General NewsNews
21 May 2026

Washington Moves to Close EV Road Tax Loophole

US lawmakers propose annual road fees for electric vehicles and plug-in hybrids to fund highways, sparking debate over fairness and EV incentives.

A bipartisan push in the US House of Representatives is seeking to close a decades-old funding gap by introducing an annual road fee for electric vehicle owners, a move that has drawn both support and sharp criticism from environmental groups.

Under the proposed legislation, EV owners would pay R2 227 ($130) annually towards road repairs, while drivers of some plug-in hybrid models would face a R578 ($35) charge, according to Reuters. The fees form part of a broader five-year highway reauthorisation bill seeking to authorise $580 billion in infrastructure funding before the current law expires on 30 September.

Because federal road funding relies heavily on diesel and petrol taxes, EVs have long escaped contributing to repair costs. The bill aims to address this by introducing fees that would rise by R83 ($5) annually from 2029, eventually reaching R2 475 ($150) for EVs and R825 ($50) for plug-in vehicles.

The bill was introduced by Republican Sam Graves and Democrat Rick Larsen, chairs of the House Transportation and Infrastructure Committee, reflecting rare cross-party agreement on the issue. However, not everyone is on board. The Sierra Club condemned the proposal, arguing it would slash EV charging infrastructure funding and "includes an irresponsible tax for EV and plug-in hybrid drivers."

The Electrification Coalition has previously highlighted the disparity, pointing out that while a proposed R4 122 ($250) EV fee was considered, an average petrol vehicle owner pays only R1 452 ($88) in annual federal fuel taxes.

Congress has not raised fuel taxes in three decades, and more than $275 billion, including $118 billion from the 2021 infrastructure law, has been drawn from the general fund to plug the shortfall.

The bill also covers autonomous vehicle safety standards, requiring performance-based regulations for commercial vehicles, while mandating human operators on autonomous school buses. Analysts caution that the November elections may complicate efforts to finalise a deal before the September deadline.

Photo: Unsplash

S

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