Congress proposes $1,000 tax on EV purchases, raising cost of cleaner cars
H.R. 1253 — Fair SHARE Act of 2025 · Filed by Dusty Johnson (R-SD) · 4 cosponsors · Introduced Feb 12, 2025 · Referred to committee
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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 full analysis lists 4 implications of this text.
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)