Is Texas Targeting EVs?

Texas is going to impose a $400 extra registration fee on new electric vehicles (EVs). It will also impose a $200 yearly surcharge for renewing EV registration. It may take federal legislation to neutralize these highly discriminatory Texas policies.

Some additional fee for electric vehicles could be reasonable. Highways are maintained with money from gasoline taxes, and electric cars don't use gasoline. But the Texas fees are out of line with the gasoline taxes paid by Texas motorists.

The Texas gas tax is only 20 cents per gallon. The average Texas driver uses about 440 gallons of gas annually, so Texas is collecting only about $88 per year from its gas tax. That is a lot less than $200 for EVs, let alone the initial $400 EV surcharge for the first year.

But those favoring the Texas fees claim they are designed to make up for both the state and the federal gas taxes. Applying both taxes to the 440 gallons makes the total annual tax $169 for the average Texas driver.

Everything else being equal, the difference between $169 and $200 might not be worth making a huge fuss about. It is probably "close enough for government work."

But everything else is not equal here. The amount of gas tax paid by drivers of conventional cars is proportional to how much they drive. Drive a little, pay a little tax. Drive a lot, pay more tax.

By contrast, the tax paid by EV owners is a flat amount no matter how much they drive. This is unfairly harsh for EV owners who don't drive very much, and unfairly lenient for those who drive a lot.

A just system would base the extra fee for EVs on the number of miles driven.

Even if the $200 a year surcharge were reasonable, the extra $400 initial registration charge is outrageous. It looks as if the Texas legislature, in the pockets of the petroleum industry, is trying to discourage Texans from buying electric cars.

Some states, like my own state of Oregon, have incentives to encourage purchase of EVs. When we bought our Chevrolet Bolt EV five years ago, we received a check for $2,500 from the state, in effect reducing its price.

Of course the Texas Legislature is free to enact disincentives, but this does fly in the face of the national policy — enacted by Congress — to encourage people to buy EVs.

What might be done to counteract the Texas disincentive? Perhaps a strategy like one employed during the Nixon administration.

Because of a gasoline shortage caused by an Arab boycott on selling us oil, President Richard Nixon wanted a reduced national speed limit. This would reduce the shortage, since cars get much better mileage at lower speeds.

Since running the highways is a state responsibility, Congress was not considered to have authority to enact speed limits. But the state governments didn't want to enact lower speed limits themselves.

Even so, Nixon got his lower speed limit. Congress cut off payments from the national Highway Trust Fund to states which did not enact a 55 miles per hour speed limit. These funds being an important part of state finances, state legislatures all reluctantly knuckled under.

National Highway Trust Fund payments are still an important part of state budgets. Congress should therefore consider legislation cutting off federal highway payments to states like Texas that unfairly discriminate against EVs.

The money saved could be used to increase the federal subsidy for EV purchasers in those states, hopefully neutralizing the disincentive enacted by the state legislatures.

Paul F. deLespinasse is Professor Emeritus of Political Science and Computer Science at Adrian College. Read Professor Paul F. deLespinasse's Reports — More Here.