by Owners of electric vehicles and plug-in hybrids in Minnesota will now have to pay more. New legislation that increases registration fees for these vehicles takes effect this month. This means drivers’ annual costs will rise, and for some models – very significantly.
New Registration Rules
Until now, electric vehicle owners in the state paid a fixed annual fee of $75 instead of a fuel tax, the funds from which traditionally go towards road maintenance. Under the updated rules, effective January 1, 2026, the minimum fee for all electric vehicles has doubled and is now $150. Plug-in hybrid drivers, who were previously exempt from this fee due to partial gasoline use, have now also been included in the system, with a new minimum payment of $75 established for them.
The updated fee is not fixed. It depends on the vehicle’s initial recommended price and its age. In the first year of registration, fully electric vehicles will be charged an additional fee of 0.5 percent of the manufacturer’s suggested retail price. For plug-in hybrids, the rate is 0.25 percent.
As the vehicle ages, the fee decreases annually according to a special scale. Already in the second year, 95 percent of the initial recommended price will be used for the calculation. This figure drops to 90 percent in the third year, to 80 percent in the fourth, and continues to decrease in 10 percent increments. For vehicles older than ten years, the fee will be calculated from just 10 percent of their initial price.
Implications for Popular Models
For those considering an electric pickup, such as the Ford F-150 Lightning, the fee in the first year could reach $325. In the second year, it will decrease slightly – to $309, and in the third, it will drop to approximately $253. Owners of one of the state’s most popular electric vehicles, the Tesla Model 3, will pay $221 in the first year, $210 in the second, and about $172 in the third.
Reportedly, legislators presented the new system as a way to ensure that funding for road infrastructure keeps pace with the transition away from internal combustion engines.
However, this step has caused concern, as it could dampen enthusiasm for electric vehicles and plug-in hybrids precisely at a time when their adoption is just gaining momentum.
The increase in registration fees is not the only policy change in the works. Starting July 1, 2027, all public charging stations in the state with a capacity of 50 kW and above will be subject to a new tax of five cents for each kilowatt-hour delivered. Although this fee is relatively small, it creates additional financial pressure on electric vehicle drivers who use fast charging.
These changes are occurring against the backdrop of a nationwide discussion about how best to fund road infrastructure in the era of electric transportation. Many states are experimenting with various models, combining fixed fees, taxes on electricity for charging, or even mileage tracking. Minnesota’s approach, which emphasizes the vehicle’s value, is one of the most differentiated. This could create interesting dynamics in the used car market, where older, and therefore cheaper to maintain under the new rules, electric vehicles may become even more attractive to buyers looking to avoid high annual costs. In the long term, the success of such a system will depend on whether the collected funds are sufficient to maintain the roads, and whether the financial barriers become too high for a mass transition to clean technologies.
