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Tennessee To Triple Electric Vehicle Road Tax To $300 Per Year As More EVs Hit The Road

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If you thought buying an electric vehicle was going to get you out of paying a gas tax, then you’re in for a big surprise, especially if you live in Tennessee!

No, you won’t be paying a gas tax, but you might soon be paying a $300 per year electric vehicle fee, a 3x increase from the current $100 annual fee Tennessee already imposes. EV tax across the country is also going up.

Tennessee Gov. Bill Lee (R) is considering allowing express toll lanes on highways and tripling a fee for electric car owners as he targets his first big push after winning reelection — paying for tens of billions of dollars in roadway projects, according to the Associated Press.

The Republican Governor has made himself clear that he will not raise the gas tax, add fully tolled roads, or issue debt in lieu of the state’s pay-as-you-go road funding method.

Lee said the move to triple the EV tax fee is crucial to move quickly on building roads. With Tennessee’s rapid growth and truck traffic, state transportation officials say $26 billion in projects are needed to address worsening congestion, and only $3.6 billion of it is planned under a big swipe at roads by Lee’s predecessor. Officials also say projects are taking too long, on average 15 years to complete and that they are coming in 40% over budget.

As more people switch over to electric vehicles, it’s looking less reliable to fund roads via gas taxes. Tennessee is also becoming an electric vehicle production hub, highlighted by a massive upcoming Ford electric vehicle project with a partner company’s battery factory.

Per the Associated Press, Lee will need Republican lawmakers on board for much of what he wants. That includes opening up the possibility for private companies to bid to build new express lanes on highways and impose tolls for profit. Lawmakers would also need to approve raising the annual fee for owning an electric vehicle from $100 to $300.

The $300 electric vehicle fee could be the country’s most expensive. As of July, 31 states have a similar yearly fee, ranging from $50 in Colorado to $225 in Washington, according to the National Conference of State Legislatures. Eley says the increase better reflects what electric car drivers would be paying in federal and state gas taxes.

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