Michigan Raises EV Registration Fees by 83%

News Summary

Michigan’s new road-funding legislation has led to a controversial 83% increase in annual registration fees for electric vehicles, raising costs to a total of $260. Critics argue this move is unfair and could hinder EV adoption, while supporters claim gas vehicle drivers pay a larger share overall. Senator Sam Singh has proposed adjustments to lessen the burden on EV owners, but progress on the proposal has stalled. The situation highlights the ongoing debate over transportation funding and environmental sustainability in the state.

Lansing, Michigan — Michigan’s new road-funding plan will significantly raise annual registration fees for electric vehicles (EVs), marking a controversial increase of 83%. Following the new legislation, EV owners will see their annual registration fees rise by $100, bringing the total to $260 before additional standard vehicle registration costs are added. With the total fees for some EV owners potentially exceeding $400, this change positions Michigan with the highest EV taxes in the nation, tied with another state, according to the Michigan Energy Innovation Business Council (MEIBC).

The fee increases stem from legislation that has removed the sales tax from fuel while simultaneously increasing the fuel tax. Consequently, owners of gasoline vehicles will not experience an increase in their total tax burden. The state’s regulations stipulate that there is a mandated $5 increase in the EV registration fee and a $2.50 increase for hybrid vehicles for each 1-cent increase in the state’s gas tax. Currently, the state has approximately 11,000 battery and hybrid-plug electric vehicles registered.

Critics of the fee increase, including representatives from the MEIBC, have labeled the hike as unfair and a potential barrier to EV adoption in Michigan. Even prior to this change, EV drivers were reportedly contributing around $20 more per year towards road maintenance compared to their gasoline-powered counterparts. Supporters of the increase, however, argue that studies comparing tax burdens on gasoline and electric vehicles suggest that gasoline drivers contribute more overall.

In response to the concerns surrounding the increase, Senator Sam Singh has proposed Senate Bill 593, aimed at easing the burden on EV owners. This bill would adjust the fee structure such that plug-in hybrids would face an increase of only 94 cents for every cent increase in gas tax, while EVs would see a raise of $1.88 per cent. The MEIBC has voiced its support for this proposal, noting that it would only reduce state revenue by approximately $10 million.

This latest development reflects a growing tension between the need for road maintenance funding and the push for sustainable transportation solutions. Advocates for electric vehicle adoption argue that less restrictive measures could expedite the shift towards electric vehicles, which, in turn, could positively impact Michigan’s power grid and infrastructure expansion plans.

Currently, Singh’s proposal is stalled, having been referred to the Senate Committee on Appropriations without any progress reported as of mid-October. The situation continues to evolve, with stakeholders on both sides of the argument pressing for their interests as Michigan navigates the complexities of modern transportation funding and environmental sustainability initiatives.

Deeper Dive: News & Info About This Topic

• MLive: Michigan’s New EV Fees
• Detroit News: EV Registration Fee Hike
• Axios: End of EV Tax Credits in Michigan
• Fox2Detroit: Whitmer Backs EV Fees
• Google Search: Michigan Electric Vehicle Registration Fee