Congress has proposed a new annual federal tax on clean vehicle owners. As currently written, in a bill before the House of Representatives, the tax would unfairly penalize drivers of cleaner, more efficient vehicles and would hit senior drivers the hardest.
The sponsors of this proposal say that it’s needed to ensure that owners of EVs and hybrids pay for their use of roads and bridges. They call it an “annual registration fee”—but, clearly, it’s a tax. And it’s wildly out of step with what other vehicle owners would pay.
To assess the impact on drivers, Consumer Reports calculated the average federal gas tax that would be paid by owners of different vehicle types. The results were striking. If the proposed annual tax were to be put in place, owners of cleaner, more efficient vehicles would end up paying significantly more in combined federal vehicle taxes than owners of even the largest, most inefficient gasoline-powered vehicle you can buy.
In order to reach these estimates, we compared the proposed clean vehicle tax of $250 for EVs and $100 for hybrids to the estimated annual federal gas tax the typical American pays for different vehicle types. We looked at a typical EV and a popular hybrid SUV, as well as the average new vehicle, the average vehicle on the road, and one of the most inefficient vehicles on the market today, a full-size, gasoline-powered V8 pickup truck.
The average EV owner, for example, would pay more than three times as much in annual federal vehicle taxes as the average owner of a new gasoline-powered vehicle and more than twice as much as drivers of some of the least efficient vehicles you can buy. Seniors, who typically drive far fewer miles than average, would be disproportionately affected. With this new tax, a senior driving an EV would be expected to pay almost six times as much, than if they drove the average new vehicle getting 28 miles per gallon of gas.
Hybrid drivers are similarly disproportionately targeted by this new tax. A typical consumer driving a popular hybrid SUV would be hit with more than twice the annual bill for federal vehicle taxes than if they had chosen to drive a much less efficient conventional internal combustion engine vehicle. In fact, a hybrid owner who parks their vehicle in the garage for the entire year and never drives it would still pay more under this new program than the average owner of the average U.S. vehicle pays in annual federal gasoline taxes. Like with EVs, senior drivers with a hybrid would be harmed the most by this unfair tax. A typical senior who chooses a popular hybrid SUV would end up paying more than three times as much than if they had chosen a less efficient, non-hybrid vehicle.
The inequitable impact of this proposed new clean vehicle tax would also unfortunately increase over time. While the bill ties the clean vehicle taxes to inflation, it makes no such change to the gas tax. This will result in further widening of the gap over time between the total federal vehicle tax paid by EV and hybrid owners and the owners of conventional gasoline-powered vehicles.
Even if the amount of the proposed taxes were set to levels more comparable to what a typical driver pays in annual federal gas taxes, fixed annual taxes still present fundamental limitations as a road funding solution. They treat all drivers the same, despite the fact that the amount individual Americans drive in a year can vary widely. Also, collecting the entire annual tax amount as a lump sum can place an undue burden on consumers living paycheck to paycheck, especially when federal vehicle taxes are collected on top of state vehicle taxes.
Attempting to solve the complex problem of future road funding in a world where inflation is increasing costs and vehicles continue to use less fuel is a worthy goal. However, solving the problem in a way that shares the cost equitably across society is not a simple task, and not one that should be attempted in a rushed process with limited stakeholder engagement. The deficits in the Highway Trust Fund originate primarily from Congress’s unwillingness to change the gas tax for over 30 years, and not due to the small number of vehicles on the road that are powered by electricity. A recent analysis from the Union of Concerned Scientists concluded that while EVs are responsible for a 2% reduction in the effectiveness of the federal fuel tax, increased road construction costs are responsible for a 79% reduction in the effectiveness of the fuel tax.
What is needed 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 politically driven, punitive taxes designed to discourage the adoption of cleaner, more efficient vehicle options.
Methodology:
Gas tax estimates were calculated by dividing the average annual miles traveled per light duty vehicle in 2023 (11,106 miles) from the Federal Highway Administration by the fuel economy of each vehicle type and multiplying by the federal gas tax of $0.184. Average per vehicle driving by Americans age 65 and older was calculated by multiplying the average annual miles per vehicle by 0.57. The factor for relative driving for Americans 65+ compared to the average American was derived from a study from the Federal Highway Administration highlighting annual driving patterns by different demographic groups.
The fuel economy for a hybrid SUV (39 mpg) was based on an 2025 AWD Toyota RAV4 Hybrid. The fuel economy of the average new vehicle (28 mpg) is based on the estimated average fuel economy of 2024 model year vehicles from the EPA Automotive Trends Report. The average existing vehicle fuel economy (23 mpg) was based on 2023 data from the Federal Highway Administration. The fuel economy of a full-size V8, 4WD pickup (19 mpg) was based on a 2025 Ford F150 5.0L V8.