Local car dealership owner share thoughts on Michigan EV, hybrid registration fees rising next year

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Fees will jump from $160 to $260 for owners of electric vehicles. Plug-in hybrid owners will also see an increase.

MONROE, Mich. — Drivers in Michigan who went electric to save on gas could soon be paying more in another way.

Starting on Jan. 1, 2026, annual registration fees for electric and plug-in hybrid vehicles will nearly double under a state-approved plan to boost road funding.

Electric vehicle owners currently pay $160 a year to register their cars, but that will jump to $260. Plug-in hybrid drivers will see their annual fee increase from $60 to $110. Larger electric vehicles — such as trucks and buses — could see an even bigger hike.

The increases are part of Gov. Gretchen Whitmer’s road funding plan for 2026, which ties EV registration fees to Michigan’s motor fuel tax. That tax is also increasing from 31 cents to 51 cents per gallon next year, though the state is removing the sales tax on gasoline and diesel fuel.

Ralph Mahalak Jr., owner of the Monroe Dodge Chrysler Jeep Superstore, says the changes make sense.

“We definitely need the revenue to fix the roads,” said Mahalak. “The EVs are very heavy and have a big impact on our roads, so we need money from those owners and lessees to help.”

Mahalak says Michigan’s infrastructure is in poor condition and believes these changes could shift the local car market back toward hybrids and gas-powered vehicles.

“I think electric vehicle sales are going to go way down in 2026,” he said. “You’re going to see a decent run with the hybrids, but I think there’s going to be a big increase in gas-powered vehicles.”

Michigan collected roughly $1.2 billion from motor fuel taxes in 2023, according to state budget data.

Still, not all lawmakers agree with the new fee structure. State Sen. Sam Singh, D-East Lansing, recently proposed Senate Bill 593, which would scale back how sharply EV and hybrid registration fees rise alongside the fuel tax. Under his plan, plug-in hybrids would see an increase of 94 cents for every cent the fuel tax rises above 19 cents per gallon, while full EVs would increase by $1.88 per cent.

Michigan currently ranks among the highest states in the country for annual EV registration costs — tied with New Jersey under the new plan.