Sponsors (5)
The bill secures predictable, dedicated funding for roads and transit by taxing electric vehicles and batteries, but it raises costs for EV purchasers, risks slowing EV adoption (reducing environmental benefits), and adds compliance burdens for small sellers.
State and local governments get a new, dedicated funding stream paid by an EV/battery tax to maintain and invest in roads, bridges, and transit, helping preserve infrastructure quality that benefits drivers and taxpayers.
Provides a predictable, ongoing revenue source for highway and transit funding beginning after Dec 31, 2025, reducing budget uncertainty for transportation projects.
People who buy electric vehicles or batteries will face higher upfront costs because of the new excise-style tax, increasing financial burden on taxpayers and middle-class families and shifting more of road funding onto EV purchasers.
Higher EV prices could slow consumer EV adoption, undermining expected emissions reductions and public-health benefits from faster electrification.
Small dealerships and retailers that sell EVs and batteries will incur added compliance and tax-administration burdens.
Based on analysis of 2 sections of legislative text.
Introduced February 12, 2025 by Dustin Johnson · Last progress February 12, 2025
Imposes a new federal tax on sales of electric vehicles and on batteries and directs the revenues into the Highway Trust Fund; the change applies to vehicle and battery sales after December 31, 2025. The bill adds the tax into the Internal Revenue Code and updates which federal receipts are transferred into the Highway Trust Fund. The immediate effects depend on the tax rate and any exemptions (which the text provided does not specify). Likely consequences include higher effective purchase prices for some EV buyers, new collection and reporting duties for dealers and manufacturers, and an increase in funding available for federal highway programs.