Good morning, eTags community. Today we wanted to give a bit of a heads up to our friends in the Golden State. For folks who have already made the shift, or those who are on the track towards the world of electric vehicles (EVs), this one is for you. We’re going to explore the changing environment for EV owners in the state of California. In this article we will cover the basics of:
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- Increased CA DMV fees
- Higher registration fees on EVs
- The reasons behind these cost hikes
Why have fees increased on EVs in California?
To begin with, we’ll point out that EV fees in general have experienced an increase in California. Both registration-related and non-registration costs have gone up recently. Why, you ask? Simply put, the reason is this: with the significant surge of folks turning towards electric powered vehicles, there has been a notable decrease in gasoline consumption. And because gasoline is a product that is subject to state tax, California as seen a drop in tax revenue.
What does state gasoline tax pay for?
State-imposed taxes on gasoline have been directed to California’s ongoing efforts to maintain its roads. Drivers of conventional gas-fueled vehicles naturally contribute to the upkeep of roads each time they fill their tanks. Whereas EV drivers, by default, do not.
How has the California DMV responded to the drop in gas consumption?
The state originally implemented an extra fee of $100 to be collected from drivers of Zero Emissions Vehicles (ZEVs). This fee, the Road Improvement Fee (RIF), which is issued at the time of EV registration renewals (unless the vehicle happens to be exempt), is meant to help offset the taxes lost on waning gas purchases. This fee began back in 2020 and has been increasing each year.
What is the current RIF on EVs?
The most recent calculation of RIFs is $121. But we can expect this to rise with inflation.
In addition to the RIF, what other fees to EV drivers face?
The two main categories of fees to be incurred by EV (and conventional drivers) are:
- Transportation Improvement Fee (TIF): These fees are imposed in order to fund repairs to California’s roads, bridges, and general maintenance. This fee is issued at the time of initial registration, transfers, and renewals. The amount of the fee is based on the value of the vehicle and increases accordingly.
- Vehicle License Fee (VLF): This is a fee of 0.65% of your vehicle’s purchase price or value. The proceeds of this fee go towards funding California cities and counties.
Will EV owners be able to bear the weight of the extra costs?
Considering that many people are turning towards electric vehicles as a means of both bolstering sustainable transportation alternatives as well as a form of savings in the long-term, these extra fees could be a deterrent. In fact, it could turn out to be more expensive to drive an EV than a gas-fueled vehicle. That said, last month California governor Gavin Newson proposed a new EV incentive program that would see EV manufacturers matching a state-funded contribution towards the first-time purchase of a new or used electric car, truck, or SUV.
This comes not only as a response to the rising costs of driving electric, but also as a possible solution to the government’s rescinding of tax deductions and credits on EVs. Will Newsom’s proposal come to fruition? Let’s see…
In the meantime, for all your title and tag needs, you’ve rolled up to the right place. Head on over to eTags.com and let us assist you with transfers, replacements, renewals, specialty plates, and more. Because as always, at eTags, we’re here to help!
