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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Over the next two years, homebuilder Lennar is outfitting more than 1,500 new Colorado homes with Dandelion Energy’s geothermal systems in one of the largest residential geothermal rollouts in the US.
The big draw for homeowners is lower energy bills and cleaner heating and cooling. Dandelion claims Lennar homeowners with geothermal systems will collectively save around $30 million over the next 20 years compared to using air-source heat pumps. Geothermal heat pumps don’t need outdoor AC units or conventional heating systems, either.
Geothermal systems use the sustained temperature of the ground to heat or cool a home. A ground loop system absorbs heat energy (BTUs) from the earth so that it can be transferred to a heat pump and efficiently converted into warmth for a home. Dandelion says its ground loop systems are built to last for over 50 years and should require no maintenance.
Dandelion’s geothermal system uses a vertical ground closed-loop system that is installed using well-boring equipment and trenched back into the house to connect to a heat pump. The pipes circulate a mixture of water and propylene glycol, a food-grade antifreeze, that absorbs the ground’s temperature. A ground source heat pump circulates the liquid through the ground loops and it exchanges its heat energy in the heat pump with liquid refrigerant. The refrigerant is converted to vapor, compressed to increase its temperature, then passed through a heat exchanger to transfer heat to the air, which is circulated through a home’s HVAC ductwork.
Daniel Yates, Dandelion Energy’s CEO, called the partnership with Lennar a “new benchmark for affordable, energy-efficient, and high-quality home heating and cooling.” By streamlining its installation process, Dandelion is making geothermal systems simpler and cheaper for homebuilders and homeowners to adopt.
This collaboration is happening at a time when Colorado is pushing hard to meet its clean energy targets. Governor Jared Polis is excited about the move, calling it a win for Coloradans’ wallets, air quality, and the state’s leadership on geothermal energy. Will Toor, executive director of the Colorado Energy Office, said that “ensuring affordable access to geothermal heating and cooling is essential to achieve net-zero emissions by 2050, and we’re excited to be part of such a huge effort to bring this technology to so many new Colorado homes.”
And it’s not just about cutting emissions – geothermal heat pumps help reduce peak electric demand. Analysis from the Department of Energy found that widespread adoption of these systems could save the US from needing 24,500 miles of new transmission lines. That’s like crossing the continental US eight times.
Colorado is making this transition a lot more attractive through state tax credits and Xcel Energy’s rebate programs. These incentives slash upfront costs for builders like Lennar, making geothermal installations more financially viable. The utility’s Clean Heat Plan and electrification strategy are working to keep energy bills low while meeting climate goals.
Read more: This will be the first geothermal energy storage system on the Texas grid
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Polestar has removed the Polestar 2 from its US website header in an early sign of how new tariffs will restrict choice and competition for American consumers, thus increasing prices.
The Polestar 2 is Polestar’s first full EV – the original Polestar 1 was a limited-edition plug-in hybrid.
It started production in 2020 in Luqiao, Zhejiang, China, where Polestar and Volvo’s parent corporation, Geely, was founded.
And there’s the rub: while Polestar’s newer EV, the 3 (which we just drove the new single motor version of last week), is built in South Carolina, the 2 is not.
Unfortunately, that interacts with some news that has been getting a lot of play lately: tariffs.
The US has been gradually getting stupider and stupider on the issue of tariffs, apparently determined to increase prices for Americans and decrease the competitiveness of American manufacturing in a time of change for the auto industry.
It is widely acknowledged (by anyone who has given it a few seconds of thought) that tariffs increase prices and that trade barriers tend to reduce competition, leading to less innovation.
It started with 25% tariffs on various products from China, implemented in the 2018-2020 timeframe. Then, in 2024, President Biden implemented a 100% tariff on Chinese EVs, effectively stopping their sale in the US. These tariffs included some exceptions and credits based on Volvo’s other US manufacturing, which Polestar had used to keep the most expensive versions of the 2 on sale in the US, while restricting the lower-priced versions from sale. Nevertheless, they were a bad idea.
Now, in yet another step to make America less competitive and inflate the prices of goods more for Americans, we got more tariff announcements today from a senile ex-reality TV host who wandered into the White House rose garden (which he does not belong in). These tariffs do not include the same exceptions as the previously-announced Biden tariffs.
Apparently this has all been enough for Polestar, as even in advance of today’s tariff announcements, the company suddenly removed its Polestar 2 from its website header today.
The change can be seen at polestar.com/us, where only the Polestar 3 and 4 are listed in the header area. On other sites, like the company’s Norwegian website or British website, the car is still there. The Polestar 2 page is still up on the US website, but it isn’t linked to elsewhere on the site (we’ll see how long it stays up).
We reached out to Polestar for comment, but didn’t hear anything back before publication. We’ll update if we do.
It makes sense that the Polestar 2 would still be for sale elsewhere, as it only started production in 2020. Most car models are available for at least 7 years, so this is an earlier exit than expected.
So it’s likely that all of the tariff news is what had an effect in killing the Polestar 2.
Then again, this is also just the second day of a new fiscal quarter. Perhaps the timing offers Polestar an opportunity to make a clean break – especially now that the lower-priced version of its Polestar 3 is available.
Despite the lower $67.5k base price of the new Polestar 3 variant, that represents a big increase in price for the brand, which had sold the base model Polestar 2 for around $50k originally, before all of these tariffs.
Update: Polestar got back to us with comment, but understandably, it doesn’t say much:
Polestar is a three-car company and Polestar 2 is available for customers now. There are a select number of Polestar 2s in stock at retailers that can be found on Polestar.com, but Polestar 3 and Polestar 4 will be the priority in the North American market.
Electrek’s Take
This isn’t the first car that America has been deprived of due to tariffs. The Volvo EX30, one of our most anticipated vehicles, and Electrek’s Vehicle of the Year for 2024, had its American availability pushed back due to tariffs.
Volvo decided to build the car in Belgium and export it to the US, but now that new tariffs apply to the EU as well, maybe that low-priced, awesome, fast, small EV will instead stay in Europe instead of being shipped overseas.
This shows how mercurial tariff fiats from an ignoramus are bad for manufacturing, as they mean that companies can’t make plans – and if they can’t make plans, eventually, they’ll probably just write the country making the random decisions out of their plans so they don’t have to deal with the nonsense.
And we’ve heard this from every businessperson or manufacturer representative we’ve talked to at any level of the automotive industry. Nobody thinks any of this is a good idea, because it objectively is not. All it does is make business harder, make the US less trustworthy, make things more expensive, and overall just harm America.
Yet another way that Americans are getting screwed by this stupid nonsense. 49% of you voted for inflation, and 100% of Americans are now getting it. Happy Inflation Day, everyone.
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Lucid Motors (LCID) has now had six straight quarters with higher deliveries. The delivery record comes just as Lucid prepares to begin delivering its first electric SUV, the Gravity, to customers by the end of this month.
Lucid sets sixth straight delivery record in Q1 2025
Lucid delivered 3,109 vehicles in the first quarter, up 58% from last year and topping its previous record of 3,099 set in Q4 2024.
The company also produced 2,213 vehicles at its Casa Grande, Arizona, plant in the first three months of 2025, an increase of 28% from last year. Another 600 vehicles were in transit to Saudi Arabia, where they will be assembled at its new AMP-2 plant, Lucid’s first international manufacturing facility.
At this pace, Lucid will easily top the roughly 10,200 vehicles it delivered last year in 2025 at around 12,500. Lucid will likely see even more growth this year, with customer deliveries of its first electric SUV starting soon.
During the Gravity SUV’s “celestial arrival” last week in NYC, Lucid’s interim CEO Marc Winterhoff said the EV maker is “nearly finished building all the vehicles that we wanted to build to put them into our studio and for test drives.”
| Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Full-year 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Full-year 2024 | Q1 2025 | |
| Lucid EV deliveries by quarter | 1,932 | 1,406 | 1,404 | 1,457 | 1,734 | 6,001 | 1,967 | 2,394 | 2,781 | 3,099 | 10,241 | 3,109 |
Winterhoff added, “by the end of April, we will resume customer deliveries of the Gravity.” Lucid delivered the first models in December, but they were for employees, friends, and family.
Lucid calls the Gravity a “no compromise” SUV with a range of up to 450 miles, 120 cubic feet of interior space, advanced technology, and sports car-like performance. The Gravity Grand Touring starts at $94,900, while the Touring model will arrive later this year at $79,900.
The new delivery record comes after Winterhoff told Fox Business last week that Lucid has seen a “dramatic uptick over the past two months” in orders from former Tesla drivers.
Currently, “50% of all the orders we have are from former Tesla owners,” Lucid’s CEO said. Winterhoff added that many are “looking for an option to not continue having a Tesla.”
Will we see the trend continue? Tesla announced earlier today that it delivered 336,681 vehicles in the first quarter, far less than the 390,000 Wall Street analysts expected.
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