Connecticut offers residents as much as $5,000 to buy an electric vehicle (EV), then allows them to use state roads without paying gasoline taxes or any additional fee to make up for the lost revenue.
Most states have already recognized the problem and imposed additional fees on EVs. Connecticut has gone the other way: It offers purchase rebates, gives EV owners a break on certain DMV fees and charges no annual EV surcharge—even as the Special Transportation Fund (STF) is projected to slip into the red.
A new Tax Foundation report found that 41 states impose an additional fee on electric vehicles. Connecticut is among just nine that do not.
The state is also among a smaller group that combines no additional EV fee with a purchase incentive. Connecticut’s Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) offers a standard $1,000 rebate on a qualifying new battery-electric vehicle and $500 for a plug-in hybrid. Qualifying residents can receive combined incentives of as much as $4,000 for a new electric vehicle or $5,000 for a used one.
Connecticut Is Becoming an Outlier
Nearby states have taken a different approach. According to the Tax Foundation, New Jersey charges EV owners $270 annually, Pennsylvania $250, Rhode Island $200, New Hampshire $100 and Vermont $89.
Some states both subsidize EV purchases and charge their owners an additional fee. Rhode Island, for example, offers rebates of as much as $4,500 while imposing a $200 annual EV fee. New Jersey charges $270 while offering qualifying rebates of as much as $4,000.
Connecticut does the first but not the second.
Connecticut charges electric and gas-powered passenger cars the same $120 base registration fee. Both also pay the state’s Passport to the Parks fee and, for new vehicles, the $15 greenhouse-gas reduction fee. But EVs avoid two charges imposed on newer gasoline-powered cars: the $15 Clean Air Act fee and the $40 emissions-exemption fee. That can leave the owner of a newly registered EV paying $55 less in DMV fees than the owner of a comparable new gasoline-powered car — before accounting for Connecticut’s EV purchase rebates.
Meanwhile, CHEAPR is funded through Clean Air Act fees collected on new vehicle sales and registration renewals. EVs are exempt from the Clean Air Act charge, leaving gas-powered motorists to help subsidize cars that also generate no gasoline-tax revenue.
Connecticut’s EV numbers continue to grow. As of Jan. 1, 2026, Connecticut had more than 73,000 registered electric and plug-in hybrid vehicles, a 20 percent increase over the previous year. EVs and plug-in hybrids still account for roughly 3 percent of vehicles registered in the state, but that number is rising.
The Transportation Fund’s Warning Light Is On
Connecticut’s STF supports transportation expenses including highway and transit programs, debt service on transportation bonds, and operations at the departments of Transportation and Motor Vehicles.
Its revenue comes from several sources, including motor-fuel taxes, the petroleum-products gross earnings tax, vehicle registration fees and a portion of motor-vehicle-related sales taxes.
In February 2026, the governor’s Office of Policy and Management (OPM) projected that the STF would finish fiscal year 2027 with a $37.6 million operating surplus before falling into a $237.1 million deficit in 2028. The shortfall is projected to grow to $299.5 million in 2029 and $346.5 million in 2030.
EVs are not the only strain on the fund. Transportation costs are rising, and more fuel-efficient gas-powered vehicles are also cutting into fuel-tax collections. But unlike drivers who still buy gasoline, EV owners pay no additional fee to help make up the difference.
Lawmakers considered changing that during the 2026 session. H.B. 5568 would have raised the three-year registration fee to $345 for fully electric vehicles and established a $233 fee for plug-in hybrids. That works out to $115 and about $78 per year, respectively.
Nearly every written testimony opposed the bill. Environmental organizations, EV owners and other residents argued that the higher fees would discourage EV adoption, conflict with Connecticut’s emissions goals and impose a disproportionate increase on a relatively small group of motorists.
Opponents called the proposed fee a punishment. “If anything, electric vehicles should be incentivized, not penalized because they don’t use gasoline,” Connecticut League of Conservation Voters Executive Director Lori Brown said in written testimony. That is exactly the problem: EVs do not use gasoline, so their owners pay none of the gas taxes that help fund Connecticut’s roads.
The bill died in the Finance, Revenue and Bonding Committee, leaving the policy unchanged.
End the Subsidies. Charge a Fair Fee.
An EV registration fee would not solve the Special Transportation Fund’s financial problems. But that is no excuse to keep an unfair system in place.
Connecticut pays residents as much as $5,000 to buy an EV, using a program financed partly through fees imposed on other motorists. After the purchase, EV owners pay no additional registration fee to make up for the gasoline taxes they do not pay. Drivers of gas-powered vehicles help subsidize the EV purchase and continue paying into the transportation fund whenever they fill their tanks.
Connecticut should end its EV purchase rebates and impose a reasonable annual fee dedicated to the Special Transportation Fund. The purpose is not to punish EV owners. It is to stop giving them preferential treatment at the expense of motorists who chose — or can only afford — to keep driving gas-powered vehicles.
Electric vehicles no longer need taxpayers to prop up the market. If EVs are ready for the mainstream, their owners are ready to pay a fair share of the roads they use.
