Illinois considering charging $1K fee for electric vehicles

Illinois is considering increasing the fee that citizens have to pay in order to own an electric car to $1,000 per year. The registration fee is currently only $17.50 a year.

Wait ... what happened?

This tax, as well as an increase in the state's gas tax to 44 cents a gallon (from the current 19 cent tax), would be used to fund road improvements in the state. This would give Illinois the highest gas tax in the country (Pennsylvania is the current holder of this dubious honor).

Since electric vehicle owners don't buy gasoline, state officials decided that they needed another method to raise money from them. Hybrids would be exempt from this fee, since they use gasoline.

In 2018, 6,400 electric vehicles were sold in Illinois, the seventh largest amount for a single state that year.

This fee stands in contrast to a $7,500 federal tax incentive for electric car buyers. However, once a car manufacturer delivers 200,000 vehicles this incentive drops by 50 percent. Tesla has already hit this limit. But while the federal government has been trying to encourage electric and hybrid car purchases, Illinois seems intent on doing the opposite.

A spokesman for electric truck startup Rivian told the Chicago Tribune that his company strongly opposed the move.

"Imposing fees on EVs that are over 400 percent more than their gasoline-powered counterparts is not only unfair, it discourages promising new technology that will reduce our dependence on petroleum, reduce emissions, and promote the Illinois economy," he said.

Tesla has also come out in opposition to this new proposal.

What else?

In addition to gas taxes and electric vehicle ownership fees, this law would also raise the state's annual license plate registration fee from $98 to $148.

This bill has already passed the Illinois House Revenue & Finance Committee by a 9-6 vote.