Clean vehicles are facing a triple threat from the House of Representatives, one that would harm consumers, autoworkers, and all of us who rely on cleaner air and a safer climate. The majority’s bill that would slash taxes for billionaires would eliminate clean vehicle tax credits that have allowed tens of thousands of Americans afford a new car; gut clean vehicle standards set by the U.S. Environmental Protection Agency (EPA); and impose a new and unprecedented fee on owners of electric vehicles.
Going after clean vehicles undermines a transition to electric vehicles (EVs) that is crucial to America’s economic success and global competitiveness. The United States is the global leader for attracting EV investments, with more than $300 billion in investments in new domestic factories to date. These investments are creating good jobs in states from Georgia to Michigan.
The combination of tax incentives and EPA standards is driving this transition. The incentives ensure that the vehicles are affordable, and the standards ensure that automakers deliver on their promises on EVs. In fact, this powerful combination of policies will save drivers $6,000 on the cost of owning a new vehicle while also helping spur EV sales and saving the country $13 billion a year from fewer asthma attacks and lung and heart disease.
Despite the benefits of these measures, the legislation passed by party-line vote in committees last week would gut both of these measures. The House Ways and Means committee measure would eliminate the $7,500 credit when buying a new electric vehicle and, in a totally unprecedented maneuver, the Energy and Commerce bill would overturn the commonsense and beneficial EPA standards.
Given the broad benefits to consumers and industry, the Senate should jettison both of these provisions as they make no sense.
In addition to the attack on incentives and EPA standards, the House proposal also includes a more novel attack on clean vehicles: a substantial annual tax of $250 for EV owners and $100 for hybrid vehicle owners. Additional taxes for EVs, combined with a repeal of clean vehicle tax credits that make it more expensive to buy a clean vehicle, would significantly erode—or in states that already have other punitive fees on EVs in place, erase—the fuel cost savings that driving on electricity should provide.
Add to the mix already soaring vehicle prices thanks to recently introduced tariffs, and clean vehicles would be unfairly penalized and would become unaffordable for a large proportion of the U.S. population. State EV fees and taxes already overburden EV drivers compared to their gasoline counterparts. Thirty-nine states collect EV-specific registration fees on top of conventional vehicle registration fees ranging from $50 to $250, often far exceeding what drivers of conventional vehicles pay in state gas taxes. Some states also subject EV owners to additional charging fees and electricity taxes.
All these state and proposed federal charges lumped together mean that, on average, EV drivers pay more than double what gasoline vehicles pay. All vehicles on the road contribute to the maintenance of America’s transportation infrastructure in some way and people who drive the cleanest vehicles should not pay more than those driving gasoline and diesel vehicles.
These proposed new taxes on clean vehicles are supposedly meant to shore up Highway Trust Fund (HTF) revenues, but they won’t make a dent in projected revenue shortfalls. EVs account for less than 2 percent of vehicles currently operating on American roads. If Congress is serious about returning the HTF to solvency, it needs to address the real problem: the fact that gas tax revenues have been shrinking as a result of inflation.
While the need remains to identify a long-term solution to generating revenue for the HTF, discussions about clean vehicles should be part of a holistic approach to funding transportation in the long term and should be included as part of the surface transportation reauthorization process, which dictates the level of money allocated to transportation programs and determines the sources of funding.
In April 2025, 34 environmental, health, and industry organizations signed a letter calling for Congress to oppose proposals to include new taxes for clean vehicles in the budget reconciliation process and to develop a fair and transparent approach to transportation funding through bipartisan surface transportation negotiations.
