The spike flows from a 2015 state law that ties EV surcharges to the gas tax rate, which last year’s road funding deal pushed from 31 cents to 52.4 cents per gallon — a change that left gas-powered vehicle owners paying virtually the same at the pump. EV advocates say the resulting fee overcharges drivers who were already contributing more than gas-powered owners to road upkeep; supporters say it rightly requires EV drivers to pay their share.
Michigan’s roughly 122,000 electric and plug-in hybrid vehicle owners face the nation’s highest special registration surcharges in 2026, after a road funding package signed by Gov. Gretchen Whitmer triggered an automatic fee increase tied to the state’s gas tax rate. Annual fees for light-duty EVs climbed from $160 to $267, while plug-in hybrid fees rose from $60 to $113, surpassing all 40 states that levy a similar charge, according to Bridge Michigan and the Associated Press.
The national average for a special EV registration fee is just over $100; Hawaii and South Dakota charge the least at $50 per vehicle.
How the formula works
The increase flows from a 2015 Michigan law that ties EV registration surcharges to the gas tax rate. The law adds $5 to EV fees and $2.50 to hybrid fees for every cent the gas tax rises above 19 cents per gallon.
Last fall’s road funding deal raised Michigan’s fuel tax from 31 cents to 52.4 cents per gallon, simultaneously abolishing the state’s 6% sales tax on gasoline, which had funded programs unrelated to roads. Gas-powered vehicle owners see virtually no change at the pump under the restructured formula.
The deal is expected to eventually generate more than $1.8 billion a year for road repairs, including about $1 billion in the current fiscal year. The package also draws more than $400 million a year from a new wholesale marijuana tax. The EV surcharge increase is projected to add about $12 million a year on top of that.
State Rep. Tom Kunse, R-Clare, who supported the package, said the resulting fee level is appropriate. “The goal was not to nick or punish anyone. We don’t want an undue burden on anybody,” Kunse told Bridge Michigan. “But, if we look at the math, I think it’s right where it should be.”
EV advocates dispute the math
EV advocates contend the increase overcharges a user group that was already paying more than gas-powered vehicle owners for road upkeep. The nonprofit Ecology Center estimated that Michigan EV owners were paying about $20 more per year than gas-powered vehicle owners in transportation-related taxes before the fee hike took effect.
“The thinking in the EV community is that this is way beyond what EV drivers should be made to pay,” said Karl Bloss, a longtime EV owner in Muskegon.
Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure & Transportation Association, disputed the Ecology Center’s estimate. “We still don’t even think, with this increase, that they’re still paying their fair share,” he said.
Sophia Schuster, policy principal with the Michigan Energy Innovation Business Council, said the need for road investment was real but faulted the outcome. “To be clear, there needed to be a road funding fix,” she said, but the end result of this one is “not fair.”
Rollback bid stalls in Legislature
Sen. Sam Singh, D-East Lansing, proposed a bill last fall that would have revised the formula to $1.88 per EV and 94 cents per hybrid for every penny increase in the gas tax. That would have meant a $63 fee increase for EV owners this year instead of $107, and a $32 increase for hybrid owners instead of $53. The Senate Appropriations Committee held a hearing on the bill in November but did not vote on it.
House Speaker Matt Hall, R-Richland Township, said Tuesday he will not advance the proposal. “I negotiated this historic roads deal with the governor, and the Legislature, including Senator Singh, voted for it,” Hall said in a statement. “This deal, one that many said couldn’t be done, repairs our local roads and gives stability to road funding for the future. His bill would be going back on the deal we all agreed to, and that’s not how deals work.”
Singh said he believes the fees remain worth discussing. “We had obviously tried to bring the issue up during negotiations,” he said. “I think, unfortunately, there were so many moving pieces that this is one of the pieces that got left behind.”
Whitmer’s office declined to comment on the fee increase.
A compounding headwind for EV adoption
The state fee increase arrives alongside a series of federal policy changes that have made EV ownership more expensive. President Donald Trump canceled the $7,500 federal tax credit for new EV purchases that was in place under his predecessor, revoked grants and incentives for EV manufacturing, and delayed disbursements from a multi-billion-dollar fund for EV charging stations along major highways.
EVs account for 1.3% of Michigan’s approximately 8 million registered vehicles — below the national average of about 2%, according to the state Department of State. The roughly 102,549 EVs now registered in Michigan represent a significant increase from about 20,000 in 2022, but the state is not on pace to meet Whitmer’s stated goal of placing 2 million EVs on Michigan roads by 2030. An additional 19,226 plug-in hybrids are registered in the state.
Ford Motor Co. and General Motors have both downscaled their EV ambitions in the past year, reprioritizing gas and hybrid manufacturing. Analysts have said the EV transition is expected to continue at a slower pace as cheaper EV models reach the market and lower fueling and maintenance costs make them more competitive over time.
Bloss said he does not expect the fee hike to push current EV owners back to gasoline, and he cited the benefits of EV ownership: lower per-mile fueling costs, no oil changes or belt replacements, and home charging that means “I never have to stand in the slush and fill up my car in the middle of a blizzard.” He said the increase could, however, give pause to buyers still deciding whether to make the switch.
A longer-term fix still debated
Both EV advocates and infrastructure groups say the state needs a road funding formula that charges drivers based on miles driven rather than the type of vehicle they own. Michigan lawmakers last year directed the state Department of Transportation to study usage-based charging as a long-term alternative. Oregon and Utah have piloted mileage-based fees, though critics have raised privacy concerns about the GPS tracking devices used to record miles driven.
Michigan has the 40th worst-maintained roads in the nation, according to the nonprofit Citizens Research Council. Initial plans from both Whitmer and House Republicans had called for about $3 billion a year to fix them; the road-building lobby has said Michigan needs $3.9 billion more annually.
“We’ve continued to hear over decades that road funding is a major priority for the Legislature,” Binoniemi said. “We’ve heard many different legislatures say that, but we’ve never come up with a full, long-term, sustainable solution that actually solves the problem.”
This story is based on reporting by Kelly House for Bridge Michigan, distributed through a partnership with the Associated Press.