A Texas bill requiring electric vehicle drivers to pay an additional annual $200 fee passed the state House of Representatives Thursday with a unanimous vote of 145-0. SB 505 will now head to Gov. Greg Abbott’s desk where it is expected to be signed.
Republican state Sen. Robert Nichols, who sponsored the legislation, said an additional electric vehicle fee is necessary because EV drivers don't pay gas taxes when they fuel their vehicles.
"As more of these vehicles drive on Texas roads, there are concerns about how they contribute to the funding of the roads which they use," Nichols wrote in a statement of intent when filing the bill. "Currently, Texas uses the gasoline/diesel fuel tax to fund transportation projects; however, with the growing use of EVs, the revenue from the fuel tax is decreasing, which diminishes our ability to fund road improvements for all drivers."
Nichols added that since EV drivers use the same roads as everyone else, they should be "subject to an equalization of road use consumption amount."
In response, Environment Texas Executive Director Luke Metzger released the following statement:
“The Texas Legislature is pouring sugar in the tank of the electric vehicle revolution. This punitive fee will make it harder for Texans to afford these clean vehicles which are so critical to reducing air pollution in Texas.”
Metzger acknowledged that $200 a year “isn’t going to kill the EV industry. But it will dampen the opportunity and slow the transition.”
Texas is also home to electric carmaker Tesla's (NASDAQ:TSLA) Gigafactory Texas, located in Del Valle. It is the company's U.S. manufacturing hub for its Model Y and global headquarters.
If signed into law, the legislation would go into effect on Sept. 1.
Shares of TSLA are up 2.49% in afternoon trading on Friday.