Republican Senators have proposed a new $1000 tax on all new electrical vehicles, no matter origin
U.S. Senate Republicans introduced two bills on Wednesday aiming to eliminate the $7,500 federal tax credit for electric vehicles (EVs) and impose a new $1,000 tax on EV purchases to fund road repairs.
Led by Senator John Barrasso and backed by 14 other senators, including Senate Majority Leader John Thune, the proposed legislation seeks to repeal the $7,500 tax credit for new EVs, the $4,000 credit for used EVs, the federal investment tax credit for EV charging stations, and incentives for leased EVs. Under the proposal, the credits would end 30 days after the bill is signed into law.
Detroit automakers, who have invested billions in EV and battery production, have urged lawmakers to keep the credits or at least phase them out gradually.
The second bill would impose a one-time $1,000 fee at the time of purchase, roughly equivalent to the amount gasoline-powered vehicle drivers pay in federal gas taxes over 10 years, said Senator Deb Fischer, the bill’s primary sponsor. Co-sponsors include Senators Pete Ricketts and Cynthia Lummis.
"EVs can weigh up to three times as much as gas-powered cars, causing more wear and tear on our roads and bridges," Fischer said, noting that typical gasoline vehicle users pay $87 to $100 per year toward the federal highway trust fund.
Federal road repairs are primarily funded through diesel and gasoline taxes, which EV drivers do not pay. Some states have already introduced additional fees on EVs to help cover road maintenance costs.
Transportation Secretary Sean Duffy expressed support for finding ways for EVs to contribute to road funding, saying last month, "EVs should pay their share for road use, but figuring out how to implement that is more complicated."
Congress has avoided raising federal fuel taxes for nearly three decades despite the rising costs of road maintenance. Since 2008, more than $275 billion has been diverted from the general fund to pay for road repairs, including $118 billion from the 2021 infrastructure law.
The Trump administration has frozen federal funds for EV charging infrastructure and is working to roll back aggressive emissions standards set by the Biden administration, which had projected the rules would push automakers to produce an increasing number of EVs to comply.