Taxation Without Benefits: Lowering the Annual EV Registration Fee

Georgia has one of the highest annual taxes on electric vehicles (EVs) in the nation. Currently, the fee for non-commercial alternative fuel vehicles (AFVs) is $210.87 and $316.40 for commercial AFVs.[1] These fees are determined based on a formula that changes annually, and has continuously increased over the past couple of years. These steep prices put Georgia behind only Alabama, Michigan, and Washington in terms of annual fees. As of November 2023, Georgia had approximately 75,000 EVs registered in the state, and subsequently received around $15.8 million in annual fees from their drivers. While this may appear to be a significant sum, it equated to only 0.02% of the state’s total spending in FY 2023.[2] In addition to this tax, owners of AFVs who wish to have a special alternative fuel license plate must pay an additional $35 per year.[3] These costs act as barriers for Georgians considering purchasing an electric vehicle during a time when the state’s emissions must be lowered. 

Electric vehicle usage is crucial to lowering Georgia’s greenhouse gas emissions. According to the Atlanta Journal-Constitution, transportation is the Georgia economy’s number one polluter, comprising 40.5% of the state’s economic sector emissions.[4,5] Moreover, the Environmental Protection Agency (EPA) estimates that a typical passenger vehicle generates up to 4.6 metric tons of carbon every year, which, when multiplied by the 1.563 million vehicles registered in Georgia, results in over 7 million metric tons of annual carbon emissions from transportation alone.[6] With EVs only accounting for 4.7% of Georgia’s registered vehicles, it is in the state’s best interest to promote the purchasing of EVs in order to reduce emissions and remove any barriers that might prevent one from doing so. Furthermore, as electric vehicle charging infrastructure expands, purchasing an electric vehicle becomes more feasible for Georgians and will subsequently reduce emissions.

In addition to EV charging infrastructure expanding, EV manufacturing has also expanded to Georgia. The new Rivian and Hyundai plants (which will be opening in 2024 and 2025, respectively) are expected to dramatically increase the number of EVs produced in the state, hopefully also increasing purchases and registrations as well. [7,8] It is expected that once the plants open, Rivian will be able to produce 400,000 vehicles annually in addition to the 300,000 produced by Hyundai. [9] However, many of these cars are expected to be sold outside of Georgia. In conjunction with increased charging infrastructure, lowering the annual fees removes another barrier to the purchasing of electric vehicles

The simple solution to this problem would be to eliminate the annual fees altogether, however, that might not be feasible within the current political climate. Instead, however, the formula that calculates the annual AFV fees should be amended to account for increased AFV registrations, which would simultaneously lower the fee paid by individual drivers but maintain the total amount collected by the state. Georgia’s AFV registration has been increasing dramatically, therefore this solution could ultimately end up gathering more money for the state with a significantly lower annual fee than the current value. The number of EV registrations in Georgia nearly doubled between 2022 and 2023, and with the construction of the new Hyundai and Rivian plants, these registrations are expected to increase exponentially.[10] Lowering the annual registration fees for commercial and noncommercial AFVs will lower one of the many barriers preventing Georgians from purchasing EVs. Altogether, the state should do everything in its power to increase EV registrations and, as a result, lower transportation carbon emissions.