As of June 3rd, the average gas price in Michigan was $4.27, up more than 40% from around $3.00 a year ago. More drivers are turning to electric vehicles and hybrids to cut transportation costs. But new state and federal fees risk erasing those savings.
Rising gas prices are making EVs and hybrids more attractive
With gas prices over $4 a gallon, the math on electric-vehicle ownership is hard to ignore. EV owners pay nothing at the pump for daily driving. Hybrid owners cut their fuel costs dramatically thanks to improved fuel efficiency. And both benefit from lower maintenance expenses over time. As gas prices climb, the total cost of owning an EV or hybrid widens its advantage over gasoline vehicles.
Those cost savings are driving a real shift in consumer interest. More drivers are considering EVs and hybrids to reduce their monthly transportation bills.
New taxes and fees are keeping EV ownership costs artificially high
At a time when consumers are looking for relief from high transportation costs, bad policy threatens to undermine the savings that come with EV ownership. At the state level, Michigan’s legislature raised EV and plug-in hybrid registration fees starting in 2026 by over $100 for EVs and more than $50 for PHEVs. Michigan now has the highest annual EV registration fee in the country, despite the fact that EV and hybrid drivers already pay more in annual fees than drivers of gasoline vehicles.
At the federal level, Congress is considering a bipartisan proposal to add a $130 annual fee on EV drivers and a $35 annual fee on some plug-in hybrid drivers. These fees would increase by $5 each year beginning in 2029, capped at $150 for EV drivers and $50 for PHEV drivers.
The proposed federal EV fee is nearly double what the average American pays in federal fuel taxes, estimated at $70–$90 annually by Consumer Reports. EV drivers would owe a flat $150 regardless of how much they drive. PHEV drivers would pay the new fee on top of the fuel taxes they already contribute.
Supporters argue EV drivers should contribute to road maintenance since they don’t pay fuel taxes. That’s a reasonable principle. But these proposed fee structures charge EV and hybrid drivers far more than their fair share, and far more than comparable gas vehicle drivers pay.
Michigan state Senator Singh (D-East Lansing) introduced Senate Bill 593 to roll back the state’s EV and hybrid fees to levels closer to what gas vehicle drivers pay. The bill had a hearing last fall in the Senate Appropriations Committee but has yet to be voted on.
Fair fees — not fee elimination
Clean Fuels Michigan supports EV drivers paying their fair share for road infrastructure. Michigan’s new taxes on EVs and the proposed fees by Congress represent fee structures that charge EV and hybrid drivers disproportionately. We urge Michigan’s federal delegation to oppose unfair EV fees in the Surface Transportation Reauthorization. We also call on Michigan lawmakers to pass SB 593 and fix the state’s fee structure. Avoiding these fees ensures that there are cleaner, more affordable transportation options available when consumers are seeking alternatives to high gas prices.