Virginia implements highway use fee to address electric vehicle revenue loss

The House Committee on Transportation convened on March 4, 2025, to discuss several pressing issues related to electric vehicle (EV) registration fees and road usage charge programs. The meeting highlighted the growing trend among states to implement or revise fees associated with electric vehicles as their popularity increases.

The committee noted that 39 states currently impose an electric vehicle registration fee, with amounts ranging from $50 to $290. Kansas, with a fee of $100, is among the few states that include base registration in this fee, effectively making its EV fee lower than many others. The discussion emphasized the need for states to consider indexing these fees to inflation or vehicle type to maintain their effectiveness over time, as flat fees lose value against rising costs.

Additionally, the committee explored the concept of road usage charge programs, which tax drivers based on miles driven rather than fuel consumption. Currently, four states have enacted such programs, which are seen as a potential solution to declining gas tax revenues due to increased fuel efficiency and the rise of electric vehicles. Virginia's highway use fee was highlighted as a notable example, where drivers of fuel-efficient vehicles pay a fee calculated based on average miles driven in the state, adjusted for fuel efficiency.

The committee acknowledged concerns that these fees might disincentivize consumers from choosing fuel-efficient vehicles. However, proponents argued that the savings from operating a fuel-efficient vehicle still outweigh the costs associated with these fees. The discussion concluded with a call for further exploration of these programs, as they could provide a fairer system for funding transportation infrastructure.

Overall, the meeting underscored the importance of adapting state policies to accommodate the evolving landscape of vehicle technology and usage, ensuring that all drivers contribute equitably to the maintenance of transportation systems. The committee plans to continue examining these issues in future sessions.