Republicans Propose $250 Annual EV Tax in New Transport Bill

Republicans in Congress are taking another shot at taxing electric vehicle (EV) owners, this time proposing a $250 annual federal fee for EVs in an upcoming transportation bill. The move comes as EV sales have already been struggling, with just 5.1% of new vehicles sold in January 2026 being electric, down from 8.3% a year prior.

House Transportation and Infrastructure Committee Chair Sam Graves (R-Mo.) wants to include the new EV tax, as well as a $100 annual fee for hybrid vehicles, in a bill aimed at funding highway repairs. This isn't the first time Graves has tried to tax more efficient vehicles - last year, his committee proposed an escalating EV tax that would have reached $200 per year.

The tax proposal comes as the US government has taken a decidedly anti-EV stance in recent years, rolling back fuel efficiency regulations, reducing consumer tax credits, and generally making life more difficult for electric vehicle adoption. This has contributed to a sharp drop in EV sales, with January 2026 registrations crashing to just 5.1% of the market, down from 8.3% a year earlier.

Proponents of the tax argue that EV drivers don't pay their fair share for highway maintenance, since they don't pay gas taxes. However, critics contend that the tax would further undermine the transition to cleaner vehicles at a time when emissions reductions are crucial to addressing climate change.

The proposed EV tax is sure to face pushback from environmental groups, the electric vehicle industry, and many consumers who see it as another obstacle to widespread EV adoption. As the battle over the future of transportation continues, this latest Republican move is likely to reignite the debate over how to equitably fund infrastructure while also promoting sustainable mobility.