Tesla License Fee California! (Read This First)
Previously, electric vehicles like Tesla were exempt from the California vehicle license fee program, which contributed to funding DMV affairs.
However, in 2020, the Department of Motor Vehicles decided to begin charging them a license fee following the increment of electric vehicles on the road.
It is also mandatory for Tesla owners to pay this fee based on their Tesla’s value. But what is the amount needed for this license payment?
The Tesla license fee in California ranges between $540.36 and $1,500 annually. It’s more expensive than conventional gas-powered vehicles because the State bases its license fee on Tesla’s model and value. The DMV calculates it based on the Tesla’s percentage value. But you can also get a reduced fee in California if you have a low income.
In this article, you’ll discover the cost of a yearly Tesla registration fee in California, why this price is so high, and incentives for electric vehicle owners. Let’s get started.
How Much Is the Tesla License Fee in California?
According to California’s laws regarding the registration of electric vehicles, Tesla owners must pay a license fee varying from $500 to $1500.
And depending on your Tesla model, you must also pay a yearly fee of $175. However, you should note that this fee also varies and is subject to change depending on several reasons.
These crucial components are the Tesla type, vehicle weight, and registration location.
For the Tesla type, it’s crucial to note that the DMV calculates the VLF for EVs at 1.15% of its worth and 0.65% for gas vehicles.
This data implies that a Tesla car worth $50,000 will have a VLF of $575, while a gas-powered car will be $325.
Additionally, heavier vehicles incur heavier license fees; the DMV uses a sliding scale to measure this.
Tesla cars have a gross vehicle weight rating of 4550 lbs. to 5200 lbs, meaning its VLF ranges from $525 to $585.
Furthermore, populous counties in California have higher VLF percentages, increasing the license fee.
Overall, the precise fee for this EV license can be as high as a thousand dollars or a few hundred dollars.
To accurately ascertain this, you can calculate the VLF you must pay using this website calculator from the DMV in California.
The VLF fee decreases over time until it reaches zero after 11 years. However, certain groups are exempt from paying any license fee.
They are listed below:
- Disabled veterans
- Non-resident military personnel
- Native/ federally accepted American tribes in California
- Specialized transportation cars
- Historial vehicles
Below is a table showing the VLF by Tesla model and weight.
| Tesla Models | Gross Vehicle Weight Rating (lbs) | VLF in Percentage | VLF Price Calculation |
|---|---|---|---|
| Model S | 5200 | 1.15% | 5200x$81,000×1.15%= $924.60 |
| Model X | 5400 | 1.18% | 5400x$101,000×1.18%=$1,112.80 |
| Model 3 | 4300 | 1.11% | 4300x$41,00×1.11%=$456.30 |
| Model Y | 4900 | 1.16% | 4900x$50,000×1.16%=$576.00 |
Note: these VLF prices are examples, and the table above guides you on the estimate of registering a vehicle.
What Is the Cost of Annual Tesla Registration for a Tesla in California?
The annual Tesla registration in California typically ranges from $300 to $500, varying from county of registration, Tesla model, and make to another.
Conventionally, the DMV calculates this based on the Tesla’s weight and changes yearly.
As mentioned above, this registration fee is a new program for EVs due to the legislative bill about EV road usage in 2017.
The model and year of your Tesla also affect the registration cost, lowering or increasing it if it’s newer and more valuable.
It’s vital to note that the VLF differs from the annual registration fee as it’s just a part of the registration affair.
Your Tesla’s value, weight, model, year, and other county and inspection fees make up the annual registration fee.
We’ve provided a table below to emphasize the contrast between VLF and annual Tesla registration.
| Factors | Vehicle License Fees | Annual Tesla Registration |
|---|---|---|
| Calculation method | Based on Tesla’s value | Based on Tesla’s weight |
| Price determinant | Tesla’s market value | Gross vehicle weight rating (lbs) |
| Payment Frequency | One-time payment during the first registration | Annual payment |
| Exemptions | Eligible for exemptions based on age and type | No precise exemption for Tesla EVs |
| Additional fees | It may involve county fees, local taxes, etc | It may involve district fees, special assessments, etc. |
Note: As usual, please note that this information is a general comparison and not specifically tailored for all information you may need.
Why Is EV Registration Expensive in California?
California’s Electric vehicle registration costs much because of the State’s TFS (transportation funding system).
Since the DMV bases these registration fees on a vehicle’s value, Teslas cost more because they’re more expensive. Thus, they have a higher price than conventional gasoline cars.
In addition, the State imposed this fee in 2020 on EVs to help even out gas tax revenue loss. And the fee is $100 annually, adding to the total cost of EV registration in California.
However, the Governor of California, Gavin Newsom, set out on a mission to eradicate gas-powered cars. He wishes to fight against gas emissions and create a sustainable ecosystem.
This information was still under consideration in September 2020. He aims that by 2035, nearly all, if not all, vehicles in California will be EVs.
That is why he’s submitted a bill to waive the registration fee for all EVs to relieve owners of this financial burden. That will make buying a Tesla or any other electric car attractive.
California Rebates and Incentive Programs
California is at the forefront of encouraging mass adoption of electric vehicles and has offered rebates and incentives.
A popular incentive is the Clean Vehicle Rebate program open to businesses and people buying or leasing qualified zero-emission cars.
However, rebates are open to only eligible EVs, and the amount given varies depending on your income, Tesla model, ownership preservation, etc.
Note that if you purchased Tesla Models 3 and Y between March 16, 2022, and January 11, 2023, you are exempt from this rebate.
However, the new Tesla cost reduction allows orders after January 12, 2023, to qualify for this CVRP program.
Another program is the Clean Vehicle Assistance, designed to assist Californians in purchasing or leasing clean vehicles, EVs included.
They provide eligible individuals up to $5,000 plus free installation and charging. However, all applicants must reside in California and meet some criteria before qualifying.
Furthermore, Tesla EV incentives also occur by model qualifying for the federal EV tax credit open to Californians.
- There’s a $13,000 difference between old and new prices for the Tesla Model Y.
It qualifies for Federal tax credit, CVRP, and Clean Vehicle Assistance Program, at $7,500.
- The price difference between the Tesla Model 3 old and new prices is $5,000, which is eligible for half of the tax credit ($3,750). It qualifies for other incentives within $7500.
- Tesla Model S’s old and current prices have a price difference of $9,500 and qualify for the Federal tax credit, CVRP, and Clean Vehicle Assistance Program within $7,500.
- Lastly, the model X has a price difference of $12,500 and qualifies for the Federal tax credit and other incentives, CVRP, and Clean Vehicle Assistance Program of $7,500.
While EV registration fees are pricey in California, they also offer significant incentives and programs to balance these costs, thus encouraging EV adoption.
Do Teslas Pay Road Tax in California?
Tesla vehicles pay road tax in California. It’s an EV road improvement fee that the State enforces to ensure electric car owners contribute to the upkeep and road improvement.
It’s similar to what the State expects gasoline vehicle owners to pay. This fee is $100, which the California State expects to pay annually.
It’s added to the conventional registration payment expected of all Californian vehicles.
The State uses this fund to maintain the road and other infrastructure.
Although this tax fee may appear as a financial burden, especially to Tesla owners who already have to deal with the car’s price, it’s advantageous. Below, we’ve explained these benefits.
First, it ensures that all parties (vehicle owners) in California give a fair quota to aid road maintenance.
And since Teslas are electric vehicles, this fee helps generate funds they would have paid as fuel taxes, evening out all lost revenue.
Next, the Tesla road tax financially supports the development and expansion of charging stations for electric vehicles.
This contribution indirectly helps to improve roads and support the adoption of electric vehicles in the car market while fostering charging station accessibility.
In conclusion, this mandatory road tax encourages fairness among all vehicle owners.
If gasoline car owners see that they’re the only ones paying this tax, they feel unjustly treated and stop paying the fee.
However, since all car owners pay this road tax regardless of vehicle type, the road maintenance task is evenly shared.
