As more electric vehicles hit the roads, states are grappling with the change in tax revenues they’re seeing as a result. EV buyers don’t pay gas taxes, slashing millions out of state highway budgets and making it hard to afford planned improvements. New Jersey is taking action on the issue with a controversial measure to charge EV owners an annual road tax, which will increase over the next four years to $290 in 2028.

The fee starts at $250 in July and will increase by $10 until 2028, when it reaches $290. EV buyers in the state will also have to pay four years of registration fees upfront, making it significantly more expensive to purchase a new electric model.

New Jersey isn’t the only state that has tossed around ideas for extra taxes on electric buyers, but the move could put a dent in the already bumpy road EVs face. Price remains a significant hurdle for buyers, and automakers have struggled to deliver on promises of more affordable models.

Any upward movement in cost will likely deter more people from buying electric, though it’s worth noting that New Jersey also offers a healthy $4,000 tax incentive that largely makes the tax a moot point. But, as InsideEVs pointed out, the state’s funds to support that incentive often run out before the end of the year, leaving many buyers high and dry.

 [Image: Natalia Bratslavsky via Shutterstock]

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