EV and hybrid owners hardest hit by transportation bill, environmentalists say
Published 8:29 am Tuesday, September 16, 2025
‘It’s a penalty’: Proposed tax hikes would disproportionately affect EV and hybrid owners
Environmental groups say a trimmed-down bill to fix Oregon’s roads and bridges that is up for a final vote Wednesday in the Legislature will deal a big hit to the state’s climate change fight by disproportionately raising taxes for many owners of hybrid and electric vehicles.
House Bill 3991 would raise the yearly cost of registration fees and state taxes for an owner of a hybrid or an EV who drives 12,000 miles per year to $361 annually, an Oregonian analysis of Department of Transportation data shows. In comparison, Oregonians who drive the same amount but own gas-powered cars that get 30 miles per gallon would only pay $294 per year in registration fees and state taxes.
That’s in part because hybrid and EV owners will have to pay a “road usage charge” based on the number of miles they drive.
Hybrid and EV owners who don’t want the state to track their miles would be able to opt out of the per-mile tracking program and pay a flat fee of $340, raising their annual cost for registration fees and state taxes to $425 per year, which is at least $131 more than the owner of a gas-powered car that gets 30 miles per gallon would pay if they drive 12,000 miles.
The Oregonian chose 12,000 miles because that’s the average driven per Oregon car, according to industry groups. The news organization also chose 30 miles per gallon because that’s what the most popular car sold in Oregon gets.
“The signal Oregon is sending right now is ‘Actually, we’re going to make EVs more expensive (to own and drive), on top of all these other headwinds that you’re facing,’” said Brett Morgan, an Oregon policy director for Climate Solutions, which advocates for clean energy in Washington and Oregon.
Oregon lawmakers will vote on the bill just two weeks before a $7,500 federal tax credit for buyers of new EVs will expire. The federal EV credits were suspended as part of what President Donald Trump calls the “One Big, Beautiful Bill.”
Now, environmental groups argue that Oregon’s House Bill 3991 will disincentivize the purchase of hybrids and EVs further by charging their owners more in annual taxes than owners of cars that burn solely gasoline, if they travel the average amount of miles per year.
“It just overly penalizes hybrids and EVs,” said Jamie Pang, deputy director of programs and policy at the Oregon Just Transition Alliance, which fights for social, economic and racial equity as climate change takes its toll.
Noticeably absent from the bulk of public debate over House Bill 3991, which would raise $4.3 billion for the state’s transportation system over the next decade, has been whether the bill treats EV and hybrid car owners fairly. A spokesperson for Gov. Tina Kotek did not respond to a request from The Oregonian/OregonLive on Monday about the environmentalists’ concerns.
Many proponents of House Bill 3991, however, say hybrids and EV owners should pay more. Historically, those owners have been paying a smaller share of taxes to drive on the state’s roads than gas-powered car owners. Hybrid owners pay less in state gas taxes because they buy less gas. EV owners pay no gas taxes, though like hybrid owners, they currently pay higher registration fees than gas-powered car owners.
The bill strives to address that by applying a “road usage charge” of 2.3 cents for every mile driven by hybrid and EV owners. Some environmental groups think that’s far too high.
Meanwhile, the Oregon Department of Transportation has been financially struggling with each new year. As the fuel efficiency of gas-powered cars jumps, their owners are paying less in gas taxes. That’s why Democratic lawmakers say they have no choice but to raise the statewide gas tax from 40 cents per gallon to 46 cents. More than 30 cities and two counties — Multnomah and Washington — also tack on gas taxes for fuel sold in their jurisdictions. The federal government adds another 18 cents.
In more than 4,500 pieces of written testimony submitted to the Legislature about a new tax structure for the state’s roads, many residents opposed it because they said it is hard enough as is to make ends meet. Creswell resident Ellen Pfander was one of the minority who homed in on what she described as an unfair tax “for our environment” and “those of us who spend more money to buy EVs or hybrids.”
“First we receive a tax break for buying an EV/Hybrid and now we are getting taxed for owning and driving them?!!! I guess I’ll trade it in and buy a huge polluting truck!!!” Pfander wrote.
Both Morgan and Pang, representing their respective environmental groups, say that EV and hybrid owners should pay more, just not, as Pang puts it, “a disproportionate amount.” Both advocates want the state to charge hybrid and EV owners a similar rate to what drivers of 30 mile-per-gallon cars, say a Toyota RAV4 or a Subaru Crosstrek, would pay under the new bill.
“This is not parity — it’s a penalty,” said Morgan, in written testimony to lawmakers.
Advocates for cleaner energy cars are pushing lawmakers to fine-tune the amount hybrid and EV owners pay in the next legislative short session, in early 2026, or at the very latest, the long session in 2027.
The per-mile “road usage charge” on hybrids and EVs generally is set to take effect for existing EV owners on July 1, 2027, new EV owners on Jan. 1, 2028, and owners of hybrids on July 1, 2028, whether they drive plug-in hybrids or not.
There are more than 117,000 fully electric or plug-in hybrid vehicles in Oregon. That’s less than 3% of the total number of registered vehicles.
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