Michigan's New Policy to Significantly Increase Electric Vehicle Registration Fees

Michigan is set to implement a policy that will substantially raise annual registration fees for electric vehicle (EV) owners, aligning with the state's new road-funding strategy.

 

Starting January 1, 2026, EV drivers will face an additional $100 in annual registration fees, elevating the total to $260. This increase positions Michigan among the states with the highest EV registration fees in the nation.

 

In contrast, registration fees for gasoline-powered vehicles will remain largely unchanged, leading to concerns about fairness among vehicle owners.

 

According to recent reports, the Michigan Energy Innovation Business Council (MEIBC) has expressed apprehension that these heightened fees could deter EV adoption and send mixed signals to automakers about the state's commitment to transportation electrification.

 

Earlier this month, Governor Gretchen Whitmer and the legislature agreed to remove sales tax from fuel and apply a corresponding increase to the fuel tax. While this move aims to maintain consistent tax revenue from gasoline sales, it inadvertently triggers higher registration fees for EV and hybrid vehicle owners due to existing state laws.

 

State law mandates an increase of $5 to the EV registration fee and $2.50 to a hybrid vehicle registration for every 1 cent raise in the state's gas tax. Consequently, while drivers of gas-powered vehicles will see no net change in taxes paid at the pump, EV and hybrid drivers will bear additional costs.

 

Senator Sam Singh, D-East Lansing, has introduced Senate Bill 593 to address this issue. The bill proposes modifying the existing formula to reduce the fee increases tied to the fuel tax, aiming to maintain prior EV taxes while only reducing state revenue by about $10 million.

 

As of June 2025, Michigan has approximately 85,666 registered electric vehicles, a significant increase from 20,001 in 2022. However, this growth still falls short of Governor Whitmer's ambitious target of 2 million EVs on the road by 2030.

 

Advocates argue that removing financial barriers to clean mobility could yield positive benefits for Michigan's power grid and the expansion of EV infrastructure.

 

Senate Bill 593 is currently under consideration in the Senate Committee on Appropriations, with stakeholders closely monitoring its progress.