Congress proposes $1,000 tax on EV purchases, raising cost of cleaner cars

What it does

This bill imposes a federal excise tax of $1,000 on each electric vehicle sold and $550 on each battery module weighing over 1,000 pounds intended for EV use. Revenue from these taxes flows into the Highway Trust Fund. The stated rationale is that EV owners should contribute to road maintenance like gasoline-tax payers do, though EVs are exempt from the federal fuel tax that currently funds highways.

Why we flagged it

The bill's core mechanism is straightforward: it imposes a per-unit federal excise tax on EV sales and large battery modules, with revenue directed to highway infrastructure. The framing as a 'fair share' contribution to road maintenance is the policy argument, not a concealment.

What the text implies

• The tax creates a structural incentive against EV adoption by raising their effective purchase price relative to gasoline vehicles, potentially slowing the transition to lower-emission transportation and conflicting with federal EV incentives (like the $7,500 tax credit in the Inflation Reduction Act).
• The Highway Trust Fund is traditionally funded by fuel taxes, which EVs do not pay. This bill addresses that gap but does so by taxing the vehicle itself rather than usage (miles driven), meaning a rarely-driven EV pays the same tax as a heavily-used one—a blunt instrument compared to mileage-based alternatives.
• The $550 tax on battery modules may increase costs for battery manufacturers and suppliers, potentially raising prices for stationary energy storage and grid applications beyond just vehicles.
• The effective date (January 1, 2026) creates a cliff: consumers may rush to purchase EVs before the tax takes effect, followed by a demand collapse, creating market volatility.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill directly increases the purchase price of electric vehicles and batteries for consumers, making EV adoption more expensive and slower. While the revenue theoretically supports highway maintenance benefiting all drivers, the tax specifically penalizes EV buyers—who are already paying for roads through income and property taxes—and effectively subsidizes continued reliance on gasoline vehicles by making the cleaner alternative more costly.

Who stands to gain

• gasoline vehicle manufacturers (relative competitive advantage)
• petroleum industry (reduced EV adoption pressure)
• highway construction and maintenance contractors (increased Highway Trust Fund revenue)

Named in the bill

Internal Revenue Code, Highway Trust Fund, Section 30D (EV tax credit definition), Section 45X (battery module definition), House Committee on Ways and Means

Where it stands

4 cosponsors: 4 Republicans.

• Feb 12, 2025 — Introduced · Congress.gov: “Introduced in House”
• Feb 12, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

5 lobbying clients named this bill on 7 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $3,777,377 in lobbying spend. A filing names 22 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 78% of bills with at least one filing.

Dusty Johnson, the sponsor, reported $325,500 in PAC receipts in the 2026 cycle.

• National Automobile Dealers Association — $1,191,000 on 1 filing
• American Public Transportation Association — $1,100,000 on 2 filings
• American Trucking Associations — $720,000 on 1 filing
• Portland Cement Association — $550,000 on 2 filings
• Associated General Contractors of America — $216,377 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.