Tennessee’s Electric Vehicle Fee Jumps To $274 In 2026: Why Hybrids Pay Half

Tennessee drivers with electric vehicles are now paying a new yearly fee when they renew their registration. The fee started January 1, 2024, under a law called Public Chapter 159. It’s part of Tennessee’s plan to replace gas tax money that electric vehicles don’t pay.

Most Tennessee drivers pay gas taxes every time they fill up. The state charges $0.27 per gallon. That adds up to about $274 a year for the average driver. Electric vehicles don’t use gas, so they don’t pay that tax. The new fee is meant to make things more even.

From 2024 through 2026, all-electric vehicle owners pay $200 each year at renewal. That’s already double the old $100 fee that was in place before 2024. For renewals on or after January 1, 2027, the fee jumps to $274. That matches what the average driver pays in gas taxes. Starting in 2028, the fee gets adjusted each year to keep up with inflation.

From 2024 to 2026, electric vehicle owners pay $200 yearly. In 2027, that jumps to $274.

Hybrid and plug-in hybrid drivers pay less. Their fee is $100 a year through 2027. That’s half of what full electric vehicle owners pay. The lower rate reflects that hybrids still use some gas and pay some gas taxes. Like the electric vehicle fee, the hybrid fee starts adjusting for inflation in 2028. Hybrid drivers also pay the standard $26.50 registration fee on top of the $100.

Not every electric vehicle owner pays the fee. Golf carts and other low-speed electric vehicles are exempt. Electric motorcycles are also left out. The fee mainly targets full-size passenger vehicles.

The fee only applies at renewal, not at first registration. So someone buying a new electric car in 2024 wouldn’t pay it until their registration comes up for renewal. All fees listed are in addition to the standard registration fee of $26.50, which applies to every vehicle owner regardless of type.

The Tennessee Department of Transportation proposed the idea back in November 2022. Commissioner Butch Eley pushed for it to help fund road maintenance. Some critics expressed concern that fee sticker shock could harm the financial ability of some drivers to keep their electric vehicles. When the full $274 fee hits in 2027, it’ll reportedly be among the highest electric vehicle fees in the country. Tennessee’s roads are funded largely through gas taxes, and officials say this fee helps fill the gap. At the federal level, some lawmakers have reportedly proposed a $1,000 EV purchase fee to help compensate for highway maintenance costs that gas taxes traditionally cover.

✅ Claims in this article were verified using AI-assisted fact-checking.