Minnesota Legislature approves increased electric vehicle fee to shore up funding for roads and bridges
Electric vehicle owners aren't paying at the gas pump, but they'll soon see higher fees in Minnesota, thanks to a new law doubling the surcharge for those cars to shore up funding for roads and bridges.
The current $75 annual fee will double to at least $150. How much someone pays could be steeper if they have a more expensive, newer vehicle, similar to how the state calculates registration fees, which EV owners must still pay.
For example, a new EV with a $50,000 retail price would mean a $250 fee based on that calculation, which is more than three times the current rate.
The provision was part of a bipartisan transportation package that the divided Legislature approved during Monday's special session and the objective was to find a sustainable path forward for transportation at a time when gas tax revenue — a large source of that support — is declining, according to the .
More electric vehicles on the road, which is the state's goal, will mean even fewer dollars flowing into that account in the future.
"There's kind of an irony where we want more fuel-efficient vehicles, but that decreases the amount of money that's going into our roads and bridges to maintain them," said Rep. Jon Koznick, R-Lakeville, the Republican co-chair of the House Transportation Committee. "We have about a billion dollars a year funding gap just to maintain our roads and bridges. And so that's why electric vehicles were getting a really good deal before — they're still going to get a pretty good deal."
Koznick explained he would have preferred to make the fee flat across the board and not use the formula that would increase the costs for newer vehicles, which he called "convoluted." But it was part of a compromise with Democrats in a divided Capitol, where bipartisan support was required to advance any legislation.
EV owners should be paying higher fees because those cars are heavier and do more damage to the roads, he said.
The new surcharge takes effect for car registrations after Jan. 1.
There is also a new five-cent fee per kilowatt hour of electricity at public charging stations set to take effect in July 2027, at which point the annual surcharge minimum would drop from $150 to $100.
Meanwhile, EV advocates are worried increased fees will make consumers pump the brakes on buying one when it's better for the environment.
"We do have concerns that we could be discouraging adoption at this point, at a time when the state has said it really wants to support electrification and get more EVs on the roads," said Carolyn Berninger with Drive Electric Minnesota Coalition in a March interview.
Only 1% of cars in Minnesota are electric today, Berninger said, but sales are increasing. Seven percent of cars purchased according to the Minnesota Department of Commerce. The state's goal is that .
"We feel like now is not the time to hike up EV fees because the market is still emerging," Berninger said.
Pat O'Brien of St. Paul told WCCO Wednesday that he loves his electric vehicle that he's had for the last few years. He estimates he has saved thousands in that time by not having to pay for gas.
He said he isn't quite sure how he feels about the changes.
"I understand the reasoning behind why there should be a surcharge, but I'm not sure about this extra—this is news to me that there's yet two more charges," he said.
