WASHINGTON, DC — Consumer Reports is calling on Congress to reject a proposed federal tax that would disproportionately penalize Americans who drive cleaner, more fuel-efficient vehicles. Quietly inserted into the House’s budget reconciliation bill, the proposed tax would apply to nearly a quarter of all new vehicles sold in the first quarter of 2025—including some of the most popular cars on the road. CR has denounced unfairly penalizing drivers of electric and hybrid vehicles and found that such annual taxes would hit senior drivers the hardest.
This policy wouldn’t just affect electric vehicles like Teslas and Rivians. It would also hit everyday consumers who drive hybrid versions of popular models such as the Toyota Camry, RAV4, and Tacoma; the Honda Civic and CRV; the Ford F150 pickup; the Jeep Wrangler; and others.
“Our tests show that the best hybrids provide great fuel economy without sacrificing comfort or performance,” said Jake Fisher, Senior Director of Auto Testing at Consumer Reports. “A hybrid powertrain does little to change road wear, so it makes absolutely no sense for hybrid owners to pay several times more road tax than they would for similar-sized vehicles.”
The current proposal would impose a new annual tax of $100 on hybrid vehicles and $250 on electric vehicles. But lawmakers are now considering increasing that to $250 for hybrids and $500 for EVs—a move that would leave many consumers paying anywhere from three to seven times as much as owners of similar conventional gasoline vehicles would pay annually in federal gas taxes. At either level, this new tax would result in a significant tax burden for Americans who sought refuge from high and volatile gas prices by purchasing a more efficient vehicle.
“We urge Congress to reject this proposal,” said Chris Harto, Senior Policy Analyst at Consumer Reports. “What is needed instead is a broad and inclusive conversation about the best ways to equitably fund our transportation system far into the future, regardless of how our vehicles are fueled—not punitive taxes designed to confiscate fuel savings from consumers who just want to save money for their families.”
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Media Contact: Emily Akpan, emily.akpan@consumer.org