TN will triple its dumb EV tax for inflation, but its gas tax lags inflation by ~5x
Tennessee has started the process of hiking its EV registration fee from $100 to $274 per year and beyond, aiming to continue hiking the fees in perpetuity, further increasing the disproportionately high taxes paid by EVs in the state as compared to gas cars.
We’ve covered many times before how misguided these taxes are, not least of which because they are the result of a cynical lobbying ploy by the oil industry to disadvantage a better transportation method.
Tennessee’s $100 fee was lower than that of many other states, but it still taxed EVs at a much higher rate than a similarly-efficient gas vehicle. For example, a ~140mpg gas car, if it existed, would pay ~$28 in gas taxes in a year if driven 15k miles, but a 140mpge EV, which there are multiple of, used to pay $100 even if it was low mileage. As a flat fee, it also adds a small disincentive for drivers to remain low mileage, which doesn’t help with congestion or road usage.
This year, Tennessee’s EV fee has doubled to $200 – but it’s not stopping there, with the state claiming that it will continue increasing to $274 in 2026, and then continue increasing beyond that along with inflation. Tennessee lawmakers and the Department of Transportation commissioner had asked to raise the fee to $300, which would have tripled the already-disproportionate fees that EVs pay.
But one big issue here is: inflation was not 100% last year, and won’t be 37% in the next two years. These hikes are well beyond inflation, on top of a fee that was already too high per the calculations above.
Not only that, but the gas tax has not been indexed to inflation in Tennessee. In fact, the gas tax has lagged inflation significantly, getting smaller over time in comparison to the value of a dollar. You can see a history of Tennessee gas taxes here, showing that drivers used to pay 7 cents per gallon in 1931, but only pay 26 cents now (plus a “1.4-cent special petroleum fee“). If gas taxes had kept up with inflation since then, they would be $1.42 per gallon – meaning they’re ~5.4x too low, compared to inflation.
But that’s because gas taxes didn’t go up for 50 years in Tennessee, until there was a measly 2 cent bump in 1981. Starting our calculations from that year, gas taxes are a lot closer to keeping up with inflation, but still should be about 20% higher than they currently are – and that’s without accounting for 2023’s inflation or the next few years’ worth which will be captured by this near-tripling of EV fees.
What’s worse, this year’s tax hikes were not well publicized, and many Tennessee EV drivers were left in shock with a doubling of fees from one year to the next.
If this trend keeps, then the gulf between TN’s gas tax and EV tax would continue to increase, becoming more and more unfair to EV drivers who already pay more than if they were driving a similarly-efficient gas vehicle, and much more than the amount of damage they’re doing.
The rationale for Tennessee’s tax is similar to those in other states – Tennessee is laboring under the misguided notion, propagated by Koch/fossil fuel industry propaganda, that electric vehicles don’t pay for roads. But in fact, the vehicles that are doing damage to roads also don’t pay for the damage they’re causing to roads – gas + license taxes only cover ~60% of Tennessee’s road costs, which means that fossil-powered vehicles are freeloading on at least a third of the road budget anyway.
And in actuality, virtually all road damage is done by diesel semi trucks anyway, not gas or electric cars, so road damage has little to do with passenger vehicles. An average EV does tens of thousands of times less damage to roads than a semi truck over the course of the year, so if a $274 fee is considered fair for an EV, then semi trucks should be paying registration fees in the millions of dollars – and if the latter sounds too high, then simple math means one must also acknowledge that the former is too high, if road damage is the main concern.
On top of this, gas taxes certainly don’t pay for the immense damage that burning gasoline causes, which cost society about $4 per gallon burned. The total cost of subsidies to dirty energy in America, a large portion of which goes to gasoline for motor vehicle use, was $760 billion in 2022. Few states even attempt to correct for this subsidy, with only a few having any sort of pollution pricing scheme. So gas vehicles are freeloading on our lungs even moreso than they’re freeloading on the roads.
The real solution, as ever, is to implement a drivetrain-agnostic road fee that takes into account weight and mileage, and another drivetrain-agnostic pollution fee to correct for the damage that each vehicle causes in pollution (these can be added to energy costs, tire costs, etc.). But instead, Tennessee would rather bow to fossil fuel propaganda and attempt to balance its entire road budget by overtaxing the 22,040 EVs in the state instead of implementing a long-term solution that might make gas cars (and diesel trucks) start paying their fair share.
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The US Department of Energy (DOE) today announced $1.2 billion in financing to replace Puerto Rico’s fossil fuel plants with solar and battery storage through 2032.
The DOE’s Loan Programs Office announced two conditional commitments and one loan closing to power producers in Puerto Rico. Each supports a project contracted with the Puerto Rico Electric Power Authority. The announcements include:
- The closing of a $584.5 million loan guarantee to subsidiaries of Convergent Energy to finance a 100 MW solar farm with a 55 MW (55 MWh) battery energy storage system (BESS) in the municipality of Coamo and BESS installations in the municipalities of Caguas (25MW/100MWh), Peñuelas (100MW/400MWh), and Ponce (up to 100MW/400MWh)
- A conditional commitment for a loan guarantee of up to $133.6 million to a subsidiary of Infinigen for a 32.1 MW solar farm with an integrated 14.45 MW (4.76 MWh) BESS, and a co-located standalone 50 MW (200 MWh) BESS expansion in the municipality of Yabucoa
- A conditional commitment for a loan guarantee of up to $489.4 million to a subsidiary of Pattern Energy for three stand-alone BESS in the municipalities of Arecibo (50 MW/200 MWh), and Santa Isabel (50 MW /200 MWh and 80 MW/320 MW), and a 70 MW solar farm with an integrated BESS in the municipality of Arecibo.
If all are finalized, these projects would more than double LPO’s support for utility-scale solar generation and battery energy storage in Puerto Rico.
LPO provides low-cost financing and a rigorous due diligence process, making it a valuable resource for Puerto Rico as it works to rebuild an affordable, reliable, and clean energy system. As a result of reliance on imported fuel, the persistent threat of tropical storms, and underinvested infrastructure, Puerto Ricans today face average energy costs that are twice the US average – all while consuming only one-quarter of the energy of the US per capita.
LPO’s initial loan to a power producer in Puerto Rico, Project Marahu, closed in October 2024, and when complete will add more than 200 MW of solar and up to 285 MW of stand-alone energy storage to Puerto Rico’s grid.
Through its September 2023 partial loan guarantee to Project Hestia, LPO also supports virtual power plant (VPP)-ready rooftop solar and battery storage installations in Puerto Rico. As a nationwide project, Hestia’s sponsor is committed to at least 20% of installations under Project Hestia going to homeowners in Puerto Rico.
As part of its procurement plan, Puerto Rico Electric Power Authority seeks to install 1,500 MW of battery storage and requires a minimum capacity of storage to be co-located with each utility-scale solar project. Energy storage systems currently online in Puerto Rico are being dispatched every day.
When including Marahu, LPO’s closed and conditionally committed financing supports over 100% of the capacity Puerto Rico Electric Power Authority aimed to procure under its initial request for energy storage project proposals, the first of six.
Read more: Cleantech investments to top fossil fuels for the first time in 2025
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Chevy just introduced new deals on the Equinox and Blazer EV models to make them even more affordable. With 0% interest and a new trade-in bonus, Chevy is offering over $5,000 in savings.
Chevy adds new Equinox and Blazer EV deals in January
Although the Chevy Equinox EV is already “the most affordable” EV in its class with over 315 miles range, it’s getting even cheaper.
Earlier this week, Chevy launched new deals on the 2024 Equinox and Blazer EV models. According to a note sent to dealers, viewed by CarsDirect, the electric SUVs are now available with 0% APR financing for 60 months. You can also choose from 0.9% AP for 72 months and 2.9% APR for 84 months.
This marks the best financing offer on Chevy’s newest EVs to date. The previous best rates were 0.9% APR for 60 months, 3.9% for 72 months, and 5.9% for the longer 84-month option.
On a 7-year $45,000 loan, online auto research firm CarsDirect estimates the new deals amount to around a $5,200 price cut. The lower APR rates are already offered on the Chevrolet Silverado EV pickup.
In addition, Chevy is offering a trade-in bonus of up to $3,000 on the Silverado EV and $1,000 on the electric Equinox and Blazer models. If you choose to lease, the bonus is cut in half: $1,500 for the Silverado and $500 for the electric SUVs.
Chevy’s new EV deals started on January 14 and run through March 3, 2025. The deals come as rivals like Hyundai and Ford recently launched new EV promotions.
On Thursday, Hyundai launched a new promo on the upgraded 2025 IONIQ 5, which includes monthly leases as low as $199 and a free ChargePoint home EV charger (or $400 charging credit). Meanwhile, Ford extended its “Power Promise” program earlier this month, which also includes a free home charger, among several other benefits.
The 2024 Chevy Equinox EV started at $41,900 with up to 315 miles range. Prices for the electric Chevy Blazer start at $43,690 with up to 279 miles range.
If you are ready to try out Chevy’s new electric SUVs for yourself, we’ve got you covered. You can use our links below to view offers on the Chevy Equinox, Silverado, and Blazer EV models near you.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss non-Tesla EVs getting Supercharger access, Cybertruck sales in the spotlight, Rivian getting some money from Biden, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
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Here are a few of the articles that we will discuss during the podcast:
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):
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