‘Pro-EV’ New Jersey just OK’ed the US’s highest dumb EV fee

New Jersey just signed a law approving a punitive new EV registration fee – and at $250, it’s the highest in the country.

New Jersey’s EV registration fee kicks in July 1, and then rises by $10 each year before it caps out at $290 in July 2028. Plus New Jersey new car purchases require a four-year upfront registration, so that’s more than $1,000 for new EV purchases.

The money goes into the state’s Transportation Trust Fund for road, rail, and bridges along with gas tax money. New Jersey also raised revenue targets for gas taxes by around 18% over five years – around 2 cents annually to the state’s fuel levies.

Electrek’s Take

Thinking of buying a new EV in New Jersey? Your new EV will be exempt from state sales tax, so that’s cool. And of course you get the federal Inflation Reduction Act upfront tax credit of $7,500. Nice one, Biden administration.

But wait. You’ve gotta pay $1,000 upfront for four years of registration since your EV is new. Oh, and the state funding that provided incentives of up to $4,000 for the purchase or lease of new EVs for 2022, 2023, and 2024? Afraid that’s already tapped out. Or as the state puts it, “temporarily unavailable.” Kinda takes the joy out of buying a new EV, Garden State – the thing you’re trying to get people to adopt since you banned the sale of new gas cars by 2035.

Or as Doug O’Malley, director of Environment New Jersey, put it: “New Jersey EV policy shouldn’t be schizophrenic, and this EV tax is a blunt instrument which will suppress EV sales.”

He also called the EV tax “punitive,” and we agree. O’Malley suggested before this tax was OK’ed that the tax should have been set at $75 to reflect EV efficiency.

As we at Electrek have said before, shift the entire transportation fund away from gas, diesel, and now EV taxes, and figure out a better way to raise very-much-needed money.

Calculate the taxes based on vehicle weight – and the damage the vehicle does to roads and bridges – instead. According to a US Government Accountability Office study, “a truck axle carrying 18,000 pounds is only nine times heavier than a 2,000-pound automobile axle, [but] it does 5,000 times more damage.” This can be completed when the vehicle is registered. Because, as my colleague Jameson Dow said when we discussed this, “This EV registration tax is targeting a thing that isn’t the problem, and its disincentivizing the most necessary thing.”

Another option: Eighty-four percent of US EV owners charge their cars at home. People pay tax on their electric bills – the state could tap into that extra tax income through the utilities.

But the proponents of these EV fees wouldn’t advocate for that, because these fees are pushed by the fossil fuel industry. These laws were not conceived of to fix a shortfall in revenue, but rather to target a competitor to the fossil fuel industry. And they’ve spread to many states with this disingenuous motivation – even states that have pro-EV policies.

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