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How did Indiana come up with the fee to register electric vehicles?

By Rebecca Thiele

Posted August 9, 2023

Nissan LEAF charging at the Freedom Station in Houston, TX.

A Nissan Leaf charges up at an electric vehicle charging station. EV owners pay an annual registration fee of $214 in Indiana, for hybrids it's $72. (EVgo Network / Wikimedia Commons)

How did the state of Indiana come up with the fee to register electric vehicles? Audience members in Kokomo and Indianapolis wanted to know.

Rep. Jim Pressel (R-Rolling Prairie), who helped set the fee in this past legislative session, explains the formula works like this:

Lawmakers looked at the average miles driven per year nationally divided by the average miles per gallon for a car built in 2022. Then, they multiplied that number by about 43 cents — the total excise and sales tax on gasoline in 2020.

That comes to roughly $214 — the registration fee electric vehicle owners have to pay every year. EV owners don’t have to pay federal gas taxes.

“The road has no idea who's driving on. It doesn't really care. It just knows that it needs to be repaired, maintained, and that that has to come from somewhere," Pressel said.

Join the conversation and sign up for the Indiana Two-Way. Text "Indiana" to 73224. Your comments and questions in response to our weekly text help us find the answers you need on statewide issues, including this series on climate change and solutions.

As more people go electric, funding for roads is expected to go down. Pressel said a state task force is looking into a better way to pay for Indiana’s roads.

Hoosiers actually drive about 4,500 more miles than the national average.
Had the state used that number, the EV fee would have been more than $70 higher.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.