Michigan to Start Penalizing EV and Plug-In Hybrid Drivers

2017 Toyota Prius Prime (Credit: © Toyota)

While many states and the federal government are handing out tax breaks and other incentives for switching to electric or plug-in hybrid vehicles, there are still a few seeing this switch as a negative. Michigan is in the latter group, and it’s now penalizing buyers of full-electric and hybrid vehicles with new registration fees.

These new fees will ding hybrid and EV owners when they go to renew their Michigan registration after Jan. 1, 2017. For hybrid owners, they will now be subject to a $30 surcharge each year and a $17 gas tax each year. As for EV owners, they get an even bigger penalty of $100 per year plus a nonsensical $35 gas tax per year.

Fortunately, Michigan did tweak the law so it only really impacts plug-in hybrid models instead of all hybrids. This is thanks to the definition of a hybrid vehicle as a vehicle “that can be propelled at least in part by electrical energy” and that uses a battery of “at least four kilowatt-hours,” according to the Detroit Free Press. This essentially draws the minimum line in the sand as the last-generation Prius Plug-In and its 11-mile EV range.

Now, it’s not just hybrids and EVs getting a fee hike, as Michigan is increasing all registration renewal fees by 20% and fuel taxes by 7.9 cents per gallon. These increases included with a new bill signed by Governor Rick Snyder in an attempt to raise money for road improvements. These increases will account for some $200 million per year in extra revenue.

While I understand the need to raise money for roads, I do not see the logic behind tapping the bank accounts of folks driving eco-friendly cars. Sure, they don’t add as much in fuel taxes to the coffers, but penalizing them seems counterproductive and very shortsighted in terms of the health of our planet.