Pa. Electric Vehicle Owners Face New Fee

Electric vehicle owners in Pennsylvania get an economic benefit by bypassing the gas pump, but now they will be facing a new annual fee to help fund road maintenance and improvements.

The state Legislature recently enacted the Electric Vehicle Road User Fee with bipartisan support. EV owners will pay $200 in 2025, and that will increase to $250 in 2026 followed by yearly inflation adjustments. Owners of plug-in hybrid vehicles, which still use some gasoline, will pay 25% of the EV fee. The fee will be assessed with the annual vehicle registration fee.

Pennsylvania has the second-highest gasoline tax in the nation, at 57.6 cents per gallon, which is used to fund road projects. But now they will be facing a road fee that is on the higher end of those that have been assessed by at least 32 states.

“Everyone who uses Pennsylvania roads should have to pay their part to help keep our roads safe and our bridges in top shape,” Rep. Ed Neilsen, chairman of the House Transportation Committee, said in a statement. “I’m happy to implement a solution that is fair, equitable and accommodating for Pennsylvania’s electric vehicle owners.”

The fee is projected to generate about $16 million in the first year, with revenue rising to almost $29 million by 2030. Electric vehicle owners are supposed to be pay an Alternative Fuel Tax on electricity but many don’t because they are unaware of it or because the process is too time-consuming, with owners having to self-report the tax to the Department of Revenue monthly based on how much electricity they use to charge their vehicles at home. The legislation repeals that Alternative Fuel Tax on electricity for residential charging.

As the number of EVs quickly rises, states are seeing a decline in revenue from gasoline tax, and need to find a way to replace that in a sustainable manner. A study from the Pew Charitable Trusts studied the effect of EVs on state transportation funding and determined that the decline in revenue will continue and suggested that states should model those shortfalls and plan for the future.