Minnesota lawmakers are considering higher annual fees on the owners of electric cars and new fees on hybrid vehicles.
Sen. Jeff Howe, R-Rockville, is sponsoring a bill which was heard Wednesday by the Senate Transportation Committee that would raise annual fees for electric vehicles from $75 to $250. Hybrid owners would pay a new fee of $125.
The aim of the measure is to offset lost gas tax revenue, which is used to fund highway projects. Howe said electric vehicle owners need to pay their fair share of the gas tax.
“Hybrids and these electric vehicles are actually doing more damage to our roads than standard vehicles,” Howe said.
Sandy Neren, a lobbyist representing the Alliance of Automobile Manufacturers, said the trade group would not oppose a “reasonable increase” in the existing fee for electric vehicles. But Neren said the proposal would make Minnesota’s fee the highest in the nation.
“We would look forward to working with Sen. Howe to possibly reduce the proposed fee that he has in here, so it is more in line with what other states have,” Neren said.
Brendan Jordan, vice president of the Great Plains Institute and a leader of the Drive Electric Minnesota initiative, noted that electric vehicle owners already pay more in sales taxes and registration fees.
“The last thing EV owners want to get pegged with is being free riders or freeloaders, and they do believe they are paying their fair share today,” Jordan said.
The Minnesota Department of Transportation raised concerns about the proposed fee and its impact on future investments in electric car infrastructure. Last week MnDOT released a proposal that calls for a big increase in electric vehicles on Minnesota roads by 2030.
There are about 6,000 electrical vehicles in Minnesota right now, said Tim Sexton, MnDOT’s chief sustainability officer. By 2030, the agency wants there to be 200,000 electric vehicles, about half plug-in hybrids electrics and half battery electrics.
Gov. Tim Walz included a fee increase in the budget he released this week. Walz wants to raise the fee on electric vehicles to $100 to help pay for additional charging stations.
The committee did not vote on the bill. There is currently not a House companion bill.