LANSING – Michigan electric vehicle owners are facing a significant increase in annual registration costs as state lawmakers restructure transportation funding. Starting Jan. 1, 2026, EV drivers will see their registration surcharges climb sharply as part of a plan to shore up road maintenance funds.

Fees Nearly Double for EV Owners

Under the new plan tied to increases in the state gasoline tax, EV fees will rise from $160 to $260 per year, while plug-in hybrid (PHEV) fees will go from $60 to $110 annually.

The increase stems from a 2015 statutory formula that automatically raises EV and PHEV registration surcharges by $5 and $2.50 respectively for every one-cent increase in the fuel tax — the gas tax is expected to rise by roughly 20 cents under the state’s updated budget, triggering the added EV surcharge.

Electric vehicles still make up a small share of Michigan’s vehicle fleet — about 100,000 EVs compared with roughly 7 million gasoline vehicles — even as EV registration fees rise sharply in 2026.

Who Will Pay — and How Many EVs Are on Michigan Roads

Michigan currently has tens of thousands of EVs registered, representing only about 1 % of the state’s total vehicle fleet. That works out to roughly 85,000 battery-electric vehicles on the road, with plug-in hybrids adding another estimated 18,000 vehicles.

This relatively modest number stands in contrast to Michigan’s longer-term goals, such as those outlined in the state’s climate and transportation plans that aim for millions of EVs by 2030.

How the Revenue Will Be Used

The additional EV registration fees are directed into Michigan’s transportation infrastructure fund, which pays for road maintenance, bridge repair, and other surface transportation projects across the state. Because EV drivers do not pay gasoline taxes — historically a core source of road funding — state policymakers say the increased registration fees help ensure EV owners contribute to the upkeep of the same public roads they use.

Even with the increases, the revenue is relatively modest. EV and PHEV surcharge hikes are projected to generate roughly $8 million a year for road funding once fully phased in — a small share of Michigan’s overall highway budget but an important piece of its long-term funding strategy.

How Michigan’s Fees Compare With Other States

Michigan’s upcoming $260 annual EV fee will place it near the top of the pack nationally, but not the absolute highest:

  • 39 states currently charge extra annual fees for EV registrations to replace lost gas tax revenue, with amounts typically ranging from about $50 to $400.

  • States like Hawaii and South Dakota levy some of the lowest surcharges (around $50 annually), while Washington State charges around $225 on top of standard registration.

  • In Colorado, EV fees can be as low as $50, and California often charges around $100 — lower than Michigan’s new rate.

  • Some states like Illinois charge higher registration for EVs (about $251 annually), compared with roughly $151 for a comparable gasoline vehicle.

According to national data, EV owners in many states end up paying more in total taxes and fees than drivers of gasoline vehicles when registration surcharges, electricity taxes, and other costs are added together.

Broader National Context

About 36–39 states now impose extra registration fees on EV owners, reflecting a widespread effort to replace declining gasoline-tax revenue. Fees vary widely by jurisdiction and sometimes include additional mileage or electricity usage charges.
Some states are even exploring “road usage charges” that levy fees based on miles driven, rather than flat annual surcharges, as EV adoption accelerates.

What This Means for Michigan Drivers

For Michigan drivers, the upcoming changes represent a shift in how the state balances its transportation finance goals with its climate and EV adoption ambitions. While the fee increases help sustain road maintenance funding, critics argue steep registration surcharges — especially without state purchase incentives — could dampen EV adoption or disproportionately impact middle-income EV buyers relative to gasoline vehicle owners.