You’ve just splurged on a shiny Tesla, Rivian, Hummer, Lucid or Chevy Bolt. Maybe you are thrilled to save on gas and shrink your carbon footprint. Then, a bill lands in your mailbox.

The federal government wants $250 every year just for owning your electric vehicle, with hybrid drivers facing a $100 annual hit.

This isn’t another state fee piling on; it’s a government backed plan in the U.S. House of Representatives to fund crumbling highways and bridges. As speed controls tighten with tech like Intelligent Speed Assistance (ISA) already reining in drivers, this EV fee feels like a gut punch: pay up to go green, and slow down while you’re at it.

Is this a fair tax, or a betrayal of the electric car segment? This story will fire you up!

The nation’s highways and bridges (156,000 miles of them) are in rough shape. The Highway Trust Fund, created in 1956, was created to maintain this network. It is projected to face a $142 billion shortfall over the next five years. Its main revenue source has been federal gas and diesel taxes that have been set at 18.4 cents per gallon since 1993, and hasn’t kept up with inflation or rising construction costs.

More fuel-efficient vehicles, including gas cars, hybrids, and EVs, mean less gas is sold, shrinking tax revenue further. Congress has propped up the fund with $275 billion from general tax fund since 2008, but that’s a temporary fix. Now it’s going to change.

The House Transportation and Infrastructure Committee, led by Representative Sam Graves (R-MO), proposed a $250 annual fee on EVs and $100 on hybrids to help close the gap. Graves told reporters in April 2025 that the current funding system is unsustainable. The logic seems simple: drivers who don’t pay gas taxes should contribute to road upkeep. But the plan has sparked concerns about fairness and its impact on driver choice.

The proposed fees raise questions about differences across vehicle types. Gas-powered vehicles, which make up about 80% of U.S. cars, pay an average of $88 annually in federal fuel taxes based on typical driving and fuel efficiency.

By contrast, the $250 EV fee is nearly three times higher, and the $100 hybrid fee exceeds what many gas drivers pay. This disparity frustrates some, who argue that all vehicles use the road equally, regardless of fuel type. However, others point out that EV and hybrid drivers benefit from roads without contributing to gas taxes, justifying a fee. And they weigh more than their gas counterparts.

State fees add complexity. 39 states already charge EV owners annual fees, ranging from $50 in Colorado to $290 in Pennsylvania. Hybrid fees are less common but exist in states like Alabama for $100. A federal fee on top of these could significantly increase costs for some drivers. For example, an EV owner in Pennsylvania might face $540 annually in combined fees. Meanwhile, gas vehicle owners face no equivalent federal fee, though they pay fuel taxes with every fill-up.

The fee proposal coincides with efforts to curb speeding, which contributes to 12,000 U.S. traffic deaths annually. Intelligent Speed Assistance (ISA) technology, which uses GPS or cameras to limit a vehicle’s speed to the posted limit, is gaining traction. Europe has required ISA in all new cars since 2022, and some studies have shown up to a 37% drop in speeding-related deaths.

We don’t know if there’s a direct correlation-causation here, but lawmakers will lean on those statistics. In the U.S., New York’s ISA pilot-program achieved 99% speed limit compliance, and automakers like Volvo have capped some models at 112 mph. The National Transportation Safety Board (NTSB) is pushing for ISA in all new cars by 2030. We will be covering what this is really all about in another segment.

However, ISA has drawbacks. GPS errors can misread speed limits, with many frustrated drivers complaining online about how GPS already has its issues. Privacy is another concern, as insurers might use ISA data to raise premiums for drivers who attempt to override limits, according to the Insurance Institute for Highway Safety. And we know for a fact that the data being collected is being used to raise peoples insurance rates. We’ve covered this in the past.

And insurance companies are already abusing this by purchasing your data from car manufacturers, integrated tech, and your phone are selling your information to the highest bidders. While ISA could save lives, it reduces driver control, raising questions about how much regulation is too much.

The EV fee and ISA debates highlight tensions between fairness, choice, and practicality. On one hand, roads need funding, and gas taxes alone aren’t cutting it. Heavy vehicles, like 18-wheelers, cause significant road damage, and electric vehicles are all much heavier than their ICE counterparts, causing a slightly larger percentage of road damage over time than gas-powered cars.

Recently, Congress rejected a $20 fee on all vehicles, which could have spread costs more evenly, opting instead to raise the EV fee from $200 to $250. Some see this as unfairly singling out certain drivers.

The fees could also influence vehicle choice. With 1.2 million EVs sold in 2024, adoption is growing, but higher costs and charging limitations are deterring buyers, especially those eyeing affordable models to cut fuel expenses. Gas vehicles, meanwhile it’s getting more expensive plus everyone’s insurance is increasing, this could potentially tip the scales for cost-conscious drivers. However, doing nothing isn’t an option — crumbling roads affect everyone, and the Highway Trust Fund’s deficit won’t fix itself. Doing nothing will also make the roads more dangerous.

ISA raises similar trade-offs. Mandatory technology could frustrate drivers who value autonomy and freedom. Errors in ISA systems or data misuse by insurers add practical concerns. Both the fees and speed controls reflect a broader trend: increased regulation to address systemic issues, but at the cost of individual choice. Literally it’s about control.

The Highway Trust Fund’s troubles go beyond EVs or gas taxes. Fuel efficiency across all vehicles has reduced gas tax revenue, and the 18.4-cent tax, has stayed unchanged for 32 years. And that’s equal to less than half its 1993 value. Raising the gas tax or taxing miles driven, as Virginia’s pilot-program does, could spread costs more fairly.

However, these options face political hurdles. Voters dislike new taxes, and mileage tracking raises privacy concerns. Targeting EVs and hybrids might seem like an easy fix, but estimates suggest these fees will add only 0.1–3% to transport budgets, barely denting the $142 billion shortfall.

Other ideas, like taxing heavy trucks based on road damage, have merit but haven’t gained traction, and are nearly impossible to calculate. The Congressional Research Service notes that comprehensive reform, such as indexing gas taxes to inflation or diversifying revenue with tolls, could stabilize funding. Yet Congress is leaning on stopgap measures, making drivers navigate a mess of fees and regulations.

Several alternatives could address road funding without targeting specific vehicles. A mileage-based tax, like Virginia’s, charges drivers for actual road use, regardless of fuel type. But requires tracking, which is intrusive. A small fee on all vehicles, like the rejected $20 proposal, would distribute costs broadly.

Taxing heavy trucks, could lean on the amount of impact — studies show a single 18-wheeler can equal thousands of cars in pavement wear. Raising the gas tax, though unpopular, would reflect modern costs and capture revenue from all fuel users. Each option has pros and cons.

This debate affects every driver. If you own a gas vehicle, you’re dodging new fees but still navigating crumbling roads. If you choose an EV or hybrid, you might face federal and state fees that outweigh gas tax savings. Speed controls, which are threatened to come by 2030, could limit how you drive, regardless of your vehicle. The Highway Trust Fund’s $142 billion deficit demands a fix, but the current plan raises questions about fairness and its impact on your choices.

The EV fee bill is headed to the full House, where it could pass or stall. Its outcome will shape driving costs and vehicle decisions. To stay informed, follow us and we will share the updates. If you have an opinion contact your representatives to share your perspective. The core issue: how can the government fund roads while preserving driver choice. This needs a solution that doesn’t favor one vehicle type over another while also limiting impact to your wallet. What’s your take? Should fees target specific vehicles, or is there a fairer way? Share your thoughts in the comments, and let’s keep this conversation going.

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Lauren Fix, The Car Coach®, is an automotive expert, journalist, and trusted voice in the industry. Follow her on X @LaurenFix for more insights on cars, tech, and the stories behind the headlines.