Opinion | Don’t let EV drivers get sideswiped in Michigan’s road funding fix

Michigan lawmakers are right to revisit how we fund our roads. But as the debate unfolds, there’s a critical detail being overlooked, one that could make Michigan home to the highest electric vehicle (EV) fees in the nation and undercut the state’s leadership in the automotive industry’s future.

The road funding proposal that passed the House would eliminate the sales tax on gasoline and replace it with an equivalent increase in the gas tax. For gas-powered car drivers, this would mean no increase in taxes. On the surface, that seems like a straightforward shift. But here’s the catch: Michigan’s EV registration fees are directly tied specifically to the gas tax. For every one-cent increase in the gas tax, EV drivers pay an additional $5 in annual fees.

That means a 20-cent gas tax increase, even though it’s paired with a 20-cent sales tax decrease, would push annual EV registration fees up by $100 while not increasing taxes for other vehicles at all. Combined with the already high fees Michigan EV drivers pay today, we’d be looking at the highest EV fees in the country. 

It makes sense to charge EV drivers their fair share to fund our roads in registration fees, since those drivers don’t pay taxes at the pump. But it’s clear that, for the average driver, EVs already pay more than their fair share (on average about $88 more per year for sedans and $17 more per year for trucks). There is no need to require EVs to pay an additional $100 per year. 

It’s no secret that Michigan is at the center of the global mobility transition. Automakers are investing billions in EV production, and thousands of Michigan workers are building the vehicles that will define the next century of transportation. But those investments are fragile and need Michigan’s support. 

Michigan is home to a growing EV manufacturing base and a workforce that’s adapting to build the cars of the future. We need policies that accelerate this transition, not policies that tell residents and businesses to think twice before making the switch.

And even if this were sound policy, it wouldn’t raise enough revenue to make a difference. The Michigan Transportation Fund is more than $3 billion, and EV taxes are just a drop in the bucket, at less than a quarter of a percent, even with the proposed increased taxes. That’s not because EVs aren’t contributing, but because adoption simply isn’t high enough to have an impact right now. 

We agree that Michigan needs a sustainable, long-term plan to fund road infrastructure. But that solution can’t be built on the backs of early EV adopters. EV drivers don’t use more of the roads, nor are they driving tax-free. They’re already paying their fair share for the roads, and among the highest fees in the Midwest.

If Michigan is serious about leading the next generation of transportation, we must find forward-looking, sustainable ways to fund our roads - ones that reflect where the market is going. 

We can fix our roads without reversing progress on clean mobility. Let’s not let a well-intentioned fix become a costly mistake.