Minnesota Legislature Adopts Punitive New Electric Vehicle Fees

Beginning in January 2026, Minnesota electric vehicle (EV) drivers will pay at least double in registration surcharges the next time they renew their tab fees. And starting in 2027, they will pay an additional electricity tax when they recharge at public fast charging stations.

This is due to a new law enacted by the Minnesota Legislature that changes the way EV drivers pay for road maintenance. Drive Electric Minnesota is concerned that these new state fees risk increasing barriers to EV adoption and undermining the state’s electrification and climate goals.

Minnesota drivers contribute to roadway funding through multiple sources: motor vehicle sales taxes, tab fees, and gas taxes. Because EV owners don’t use gasoline, they pay an additional surcharge each year when they renew their tabs. Since it was first implemented, the EV surcharge has been a flat fee of $75.

But based on legislation passed in June 2025, that surcharge will at least double—the new minimum EV fee will be $150, with many drivers paying $200 or more based on their car’s manufacturer’s suggested retail price (MSRP) and age. This blog post will discuss the impact these changes will have on EV drivers and what Minnesota households can expect the next time they renew their tab fees.

A new way to calculate EV surcharges

The new EV surcharge calculation is based on each vehicle’s MSRP and age, similar to the way the state calculates tab fees. In the first year of registration, an EV driver will pay 0.5 percent of their vehicle’s MSRP for their EV fee. Plug-in hybrid EV drivers will pay 0.25 percent.

Over time, the MSRP used to calculate the EV fee is adjusted downward, declining to 95 percent of the MSRP in year two, 90 percent in year three, and so on. If the vehicle is 10 years old or older, the calculation is based on 10 percent of its MSRP. See the table below for more information about this declining scale.

Table 1. Calculating EV fees based on vehicle age

Source: Minnesota Statutes 168.013 subdivision 1a, paragraph (c).

According to this sliding scale, the EV surcharge for a three-year-old vehicle would be 0.5 percent of 90 percent of its original MSRP. For example, the driver of a three-year-old Hyundai Ioniq—one of the most popular EV models—will pay the following annual fee: 0.5% X (90% X $42,600) = $192.

The driver of a more expensive three-year-old EV like a Rivian truck will pay an annual fee of 0.5% X (90% X $69,900) = $315.

See the table below for more examples of what gas car and EV drivers will pay each year under the new system:

Table 2. Representative gas taxes and EV fees for four vehicle types in Minnesota

[1] These calculations are based on new battery-electric vehicles.

[2] According to Kelley Blue Book, the average lease term is two to three years.

[3] According to a study by IHS Automotive, the average American driver owns a single vehicle for approximately 7 years.

As demonstrated in the table above, because the EV fee is highest in the earlier years of a vehicle’s life, it will have the most impact on lessees or car owners who own their vehicle for a relatively short amount of time. Used EV owners will not see as significant an impact, but their EV fees will still increase from the previous $75 flat fee in every year of ownership.

Implementing a public charging tax

In addition to the surcharge mechanism, the new law also introduces a new tax on public fast charging stations in the state.

Beginning on July 1, 2027, a tax of 5 cents per kilowatt-hour will be imposed on all public charging stations with a capacity above 50 kilowatts. This equates to about a 12.5 percent tax, assuming a public charging station collects around 40 cents per kilowatt-hour for a charge.

The tax does not apply to chargers at home residences, free public charging stations, or public charging stations with a capacity below 50 kilowatts. “Legacy chargers” (those in operation before October 1, 2023) are exempt for the first five years.

The law also creates a new Electricity as Vehicle Fuel Working Group, which will “evaluate, promote, and provide recommendations to facilitate the development and integration of electricity used as vehicle fuel” in the state. Drive Electric Minnesota will participate in the working group and looks forward to the opportunity to provide input on the path forward.

Drive Electric Minnesota’s position: New, higher fees will hinder electrification

During the 2025 legislative session, Drive Electric Minnesota expressed strong opposition to proposals to increase Minnesota’s EV taxes, including the public charging tax and higher registration surcharge. These fees will increase costs for EV owners above and beyond what most gas car drivers pay for road maintenance, penalizing those who choose to drive electric.

To make matters worse, the federal government is considering implementing its own punitive EV fees. The House of Representatives included a brand-new $250 EV fee—highly disproportionate given the average gas car driver pays just $88 per year in federal gasoline taxes—in its budget reconciliation bill package this month. The Senate stripped this specific language from its own version of the bill due to logistical concerns about how it would be implemented. However, Senate lawmakers are considering other ways to implement new fees on EV owners.

Now is not the time to introduce new, complicated fees on EVs. State and federal support for electrification has been on the decline, with the federal government phasing out tax credits for electric vehicles and electric vehicle charging infrastructure, and Minnesota’s state-level EV rebate program exhausted. Minnesota aims to increase the percentage of EVs on the roads from around 1 percent today to 20 percent by 2030—meeting that goal will require policies that aim to support electrification, not discourage it.

Next steps for Minnesota’s EV fees

Minnesota’s new annual EV surcharges will go into effect at the beginning of 2026, and the public charging tax will kick in during summer 2027. In the meantime, Drive Electric Minnesota will participate in the Electricity as Vehicle Fuel Working Group, alongside members of the Senate and House of Representatives, state agency leads, and other stakeholders interested in transportation electrification.

The legislature has laid out a number of duties the working group must carry out, including the following:

• Providing a comprehensive analysis of EV charging infrastructure opportunities and barriers;
• Developing a road map with policy and funding recommendations for sustainable transportation funding mechanisms, including a plan for the studied mechanisms to replace the electric vehicle surcharges;
• Researching and analyzing policies in other states to determine equitable and comprehensive fuel assessment methods for electric vehicles.

Through this process, we will continue to represent the interests of Minnesota EV drivers and work to support solutions that lower barriers to electrification for everyone.

Over the coming months, we will also continue to work with our policy committee members to lay the groundwork for a successful 2026 legislative session. If you would like to get involved in Drive Electric Minnesota’s policy work at the Minnesota Capitol, join the coalition today!