Alberta slaps $200 registration tax on battery-electric vehicles, starting January 2025
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Mar 7, 2024
Nicholas Sokic

The Alberta government cites road wear and tear and fuel-tax deficit as reasons for the levy. EV advocates are doubtful

The Alberta government says it will implement an annual $200 registration tax on EVs starting as early as January 2025.

The Alberta government cites road wear and tear and fuel-tax deficit as reasons for the levy. EV advocates have doubts and concerns

The Alberta government says it will implement an annual $200 registration tax on EVs starting as early as January 2025.

EV drivers will still have to pay the province’s existing vehicle registration fee as well. Plug-in hybrid vehicles are exempt.

“There’s a set of green energy technologies that this government and premier are in favour of, and there’s a set that they’re not in favour of,” William York, president of the Electric Vehicle Association of Alberta (EVAA), says in an interview with Electric Autonomy.

The tax was introduced last week as part of the Alberta 2024 budget. During the presentation, the province estimated the tax will generate $1 million in revenue for 2024-25, growing to $5 million in 2025-56 and $8 million in 2026-27.

The Alberta government says more details on the tax will come in the fall with the introduction of the new legislation.

As of March 31, 2023, Alberta had 9,338 registered EVs on its roads.

At the budget presentation, Alberta Finance Minister Nate Horner said the tax is meant to be in line with the estimated fuel tax paid by the driver of a typical internal combustion vehicle.

Alberta is the second province in Canada to impose a battery-electric vehicle (BEV) tax. In 2021, Saskatchewan implemented a $150 registration fee.

Alberta’s EV tax rationale

York says the EVAA expected the tax would come this year. Their disappointment lies with the government’s messaging and some of its rationale.

For example, in the province’s remarks explaining the reason for the tax, it said EVs are heavier and cause more road damage than combustion vehicles. However, according to York, aside from weight not being a direct factor in that damage — it’s actually the amount of force the vehicle distributes over a concentrated area that wears down roads — EVs are not materially heavier than their combustion counterparts.

The Tesla Model 3 and the BMW4 series both weigh 4,000 pounds and the Model 3 is only around 500 pounds heavier than a Toyota Camry.

“They apply a flat fee to the entire EV owner group, like we’re all driving the same vehicle and the same distance per year,” York says.

“Flat-fee charges on EVs have become commonplace in recent years, with one other province and more than 40 U.S. states implementing or having announced this type of charge, including California,” Savannah Johannsen, press secretary for the Alberta Office of Treasury Board and Finance told Electric Autonomy via email.

“Fuel tax revenue goes to the government’s general revenue, where it is used to fund programs, services and infrastructure Albertans rely on, including road construction and maintenance.”

EVs vs. plug-in hybrids

The EVAA doesn’t oppose the tax itself, it’s more about the timing of its announcement as well as what York says was the “unfairness” in the process.

York says the EVAA will reach out to the Alberta government well before the fall to discuss their issues with the tax’s implementation.

The range of issues to canvas may include the hybrid vehicle exception, which York says doesn’t make sense and acts like more of a loophole to avoid the tax, pointing again to the perceived unfairness.

(“If I’m a plug-in hybrid EV owner, I’m kind of laughing because I’m probably driving most of my mileage electric,” he says.)

York also would like to see more EV initiatives from the province regarding purchase incentives and infrastructure, like with funding for chargers at multi-unit residential buildings.

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