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Texas Governor Approves New Fee for Electric Vehicle Owners

AUSTIN , TEXAS Chargepoint DC Fast Charging Station.

AUSTIN, Texas -- Governor Greg Abbott has approved a new law introducing fees for electric vehicle owners in Texas. This move is sparking discussions about the fairness of the policy and its potential impact on the transition to green energy.

Under Senate Bill 505, which Abbott signed on Saturday, owners of electric vehicles will be required to pay $400 to register a new electric vehicle and $200 to renew the registration. This is in addition to the standard fees applicable to all vehicles. The new fee does not apply to electric motorcycles, mopeds, or autocycles.

The law aims to ensure that electric vehicle owners pay their share of highway costs, which are typically covered by a 20-cent-per-gallon gas tax paid by owners of gas-fueled and hybrid vehicles. Texas has nearly 200,000 electric vehicles in the state, with more than 30,000 new electric vehicles added to the roads this year alone.

The average owner of a gas-fueled vehicle in Texas pays approximately $130 in state gas taxes per year. Both the gas tax and the new electric vehicle fee are dedicated to the state highway fund, with some revenue also being diverted to schools.

The new electric vehicle fee is expected to bring in at least $38 million in new revenue to the state highway fund in 2024, while gas and diesel taxes will generate an estimated $3.8 billion.

However, some critics argue that the new law could hinder the adoption of electric vehicles and sends a message that Texas is "fully behind oil and gas."

"Electric vehicles should pay a gas tax – I just think the tax on the conventional cars should be much, much higher than it is," said Kara Kockelman, a transportation engineering professor at the University of Texas at Austin. "Texas is really behind the curve on trying to do the right thing by the environment."

Despite the new fee, Kockelman emphasized that owning and operating an electric vehicle, especially an all-electric vehicle, is still cost-saving in comparison to traditional gas vehicles.

The new law is set to take effect on Sept. 1, 2023.