
Michigan lawmakers are considering ways to replace the sales tax on gasoline with something that raises more revenue while requiring the owners of electric vehicles to also pay more.
Because electric vehicle owners don’t buy gas, their annual registration fee is tied to the gas tax, meaning it could rise by about $100. Right now, EV drivers pay a $160 annual registration fee in lieu of gas taxes.
Jane McCurry of Clean Fuels Michigan says she supports road funding too, but wants the formula changed so EV drivers aren’t paying more than drivers of gas-powered vehicles.
“And there’s a formula written into statute that electric vehicle tax increases $5 for every cent that the gas tax goes up.”
Michigan’s Healthy Climate Plan, along with campaigns like MI Clean Cars 2030, set a goal of two million electric vehicles on the state’s roads by 2030. But McCurry notes even as the state pushes for more EVs, the fees drivers already pay make up only a tiny share of Michigan’s road budget. She says raising them further would barely move the needle.
“Even if we were to increase EV taxes on Michigan drivers by $100, it would make up less than a quarter of a percent of all of the annual funding going toward Michigan roads. So it’s just not a good place to look when we’re trying to increase the total pot of funding here.”
Michigan has about 8 million registered vehicles, but only around 1% are fully electric. That’s about 85,000 vehicles.