New Jersey EV Drivers Hit with New $250 Annual Fee

Photo byGetty Images

Electric vehicle (EV) owners in New Jersey were recently caught off guard when they discovered a new $250 fee included in their vehicle registration renewal. This annual fee, which came into effect on July 1, 2024, applies to all zero-emission vehicles, as defined by the California Air Resources Board (CARB) standards for the applicable model year, according to the New Jersey Motor Vehicle Commission.

The fee was introduced following the signing of a bill by Governor Phil Murphy on March 26, 2024. The legislation not only renewed the state's Transportation Trust Fund (TTF) but also included an annual two-cent increase in the state gas tax. The new fee on electric vehicles is intended to ensure that EV owners contribute to the upkeep of state roads, just as gasoline-powered vehicle owners do through the gas tax.

Since electric vehicles do not use gasoline, they do not contribute to the TTF via the gas tax, which traditionally serves as a "user fee" for road maintenance. The new EV fee addresses this gap, directing funds toward road repairs, bridge maintenance, and infrastructure improvement projects across New Jersey. The fee will increase by $10 each year over the next four years, capping at $290.

The implementation of this fee has sparked concerns among some state politicians and environmental advocates. Critics argue that the fee could discourage the adoption of electric vehicles in New Jersey, counteracting efforts to reduce carbon emissions and promote greener transportation options.

State Senator Bob Smith, a Democrat from Middlesex, was among those who opposed the bill, stating before its passage, "To do anything to discourage EVs in this state is a serious policy mistake." Despite these concerns, the legislation was passed with the intention of maintaining equitable contributions to the state's infrastructure funding.

As New Jersey continues to push for greener energy solutions, the impact of this new fee on EV adoption remains to be seen. The fee represents a significant cost increase for EV owners, particularly new owners who are required to pay four years' worth of the fee upfront when they first register their vehicles.