On February 12, Senate Republicans introduced two bills to eliminate federal electric vehicle (EV) tax credits and impose a new $1,000 fee on EV purchases to fund road repairs.
The proposed legislation, led by Senator John Barrasso and supported by 14 colleagues, including Senate Majority Leader John Thune, seeks to repeal the $7,500 tax credit for new EVs, end the $4,000 tax credit for used EVs, and eliminate federal incentives for EV charging stations and leased EVs. If passed, these changes would take effect 30 days after the bill is signed into law.
A separate bill, sponsored by Senator Deb Fischer, proposes a one-time $1,000 fee at the time of EV purchase. Fischer argued that this fee aligns with what gasoline vehicle owners contribute in federal fuel taxes over ten years, helping to address the impact that EVs have on roads due to their heavier weight.
Currently, most highway repair funds come from gasoline and diesel taxes, which EV owners do not pay. Since 2008, more than $275 billion—$118 billion of which comes from the 2021 infrastructure law—has been transferred from the general fund to cover road maintenance costs. While some states have implemented EV fees, Congress has not raised fuel taxes in three decades.
Detroit automakers, who have invested billions in EV production, advocate for retaining or gradually phasing out these tax credits. Meanwhile, Transportation Secretary Sean Duffy acknowledged the necessity for EV owners to contribute to road maintenance but noted the challenges in determining the best approach.
EV adoption continues to face obstacles, including higher upfront costs compared to gasoline-powered models. Additionally, the Trump administration has taken steps to freeze EV charging funds and roll back emissions regulations that would have mandated increased EV production.
