News Summary
Pennsylvania and New Jersey are implementing new fees for electric vehicle owners in response to declining gas tax revenues. Starting in 2025, Pennsylvania will charge a $200 Road User Charge, while New Jersey’s annual road tax for EVs will begin at $250 and increase annually. Both initiatives aim to support infrastructure despite the surge in EV adoption. Concerns arise about the impact of these fees on potential EV buyers and equity compared to gas-powered vehicles, as both states look for new revenue sources.
Pennsylvania and New Jersey have introduced new fees for electric vehicle (EV) owners to address declining gas tax revenues as an increasing number of drivers are transitioning to electric and hybrid vehicles. This development comes as both states work to maintain their infrastructure amidst changing transportation trends.
Starting in 2025, Pennsylvania will impose a Road User Charge (RUC) of $200 on EV owners, which will rise to $250 in 2026. Plug-in hybrid owners will also incur charges, paying $50 in 2025 and $63 in 2026. The Pennsylvania Department of Transportation (PennDOT) is beginning to communicate these payment details to affected drivers. State Senator Dave Argall indicated that the new charge is expected to generate approximately $30 million, which will be allocated to maintaining roads and bridges in the state.
New Jersey has already enacted a $250 annual road tax for EV owners, which began last summer. This fee will increase by $10 each year and is expected to reach $290 by 2028. Additionally, buyers and leasees of new electric vehicles in New Jersey are required to pay four years of the road tax upfront, totaling $1,060 at the time of vehicle registration. This fee is collected by dealerships during the registration process.
The push for these fees comes as gas tax revenues are dwindling since EV owners do not contribute to fuel taxes. Currently, New Jersey charges a gas tax of 44 cents per gallon, while Pennsylvania’s gas tax stands at 57 cents per gallon. With the rise in electric vehicle registrations—nearly 83,000 in Pennsylvania, a 34% increase since 2023, and over 160,000 in New Jersey, a 26% increase from late 2023 to September 2024—the need for alternative funding sources has become more pressing.
Industry advocates have expressed concerns over the new fees. One notable issue is that the upfront costs in New Jersey may deter potential EV buyers, especially as state tax rebates can reach up to $2,000. There are also concerns regarding equity, particularly when comparing the fees charged to EV owners against those of fuel-efficient gas-powered vehicles, such as the Toyota Prius, which typically incur about $100 a year in gas taxes.
In Pennsylvania, the new RUC replaces the previous Alternative Fuels Tax, which was deemed too complex for EV drivers. Furthermore, certain vehicles such as golf carts and electric motorcycles will be exempt from the new charge. An online payment system for the RUC is scheduled to launch by August 2025, with plans for monthly payment options to be available by July 2026.
In New Jersey, the road tax for electric vehicles also falls under the state’s zero-emission vehicle (ZEV) fee, affecting vehicles certified under California’s clean air standards. This includes popular models like Teslas and Ford Lightnings. Despite the newly implemented taxes, EV owners in both states can still access state incentives. New Jersey offers the “Charge Up New Jersey” program, and Pennsylvania provides rebates of up to $4,000 based on income, helping to offset the costs associated with owning an electric vehicle.
The introduction of these fees indicates a significant shift in transportation funding as state governments adapt to the growing prevalence of electric vehicles. By creating new revenue streams, Pennsylvania and New Jersey aim to ensure that necessary infrastructure improvements can continue, even as traditional gas tax income declines.
Deeper Dive: News & Info About This Topic
- 6abc: Pennsylvania & New Jersey EV Fees
- Inquirer: Electric Vehicle Rebates and Sales
- Kiplinger: States with the Highest Gas Taxes
- Politico: EV Fees in States
- Tennessee Lookout: Energy Tax Credits
- Wikipedia: Electric Vehicle
- Google Search: Electric Vehicle Rebate
- Encyclopedia Britannica: Electric Vehicles
