Kentucky cities play a critical role in maintaining the roadways that span the Commonwealth. From the economic impact of commerce to daily travel for work and enjoyment, the municipal function of sustaining the state’s roads is essential to ensuring Kentuckians enjoy a high quality of life.  

Electric Vehicles: A Trending Shift on US Roads 

A growing share of transportation revenue is generated by the registration and usage of electric vehicles (EVs).  The International Energy Agency (IEA), an autonomous inter-governmental agency created by the Organization for Economic Cooperation and Development (OECD), reported that sales of EVs in the United States increased by 1.6 million units in 2024, with the sales share growing by more than 10%.  

Mobility Global forecasts that US EV sales may reach 40% of total passenger car sales by 2030, with more optimistic outlooks predicting 50%. Leading auto and battery manufacturers are increasing their investment into the EV market, with the goal of producing more battery electric vehicles (BEVs) with the goal of significantly increasing their output by 2030.  Toyota in statements regarding its electric vehicle strategy committed to producing 3.5 million units of BEVs by 2030 and began production of its $13.9 million all-battery plant in North Carolina in 2025 [1]. They also announced an investment of $800 million over the next 5 years in its Toyota Kentucky facility to manufacturer its second battery electric vehicle [2]. According to Ford, the manufacturer plans to produce 50% of its global volume in hybrids, extended-range EVs, and electric vehicles by 2030. They will also introduce its first midsize electric truck under its new flexible universal EV platform in 2027 [3].  

Federal and state governments are also investing in EV infrastructure. The Bipartisan Infrastructure Law, or the Infrastructure Investment and Jobs Act, contained $7.5 billion in new EV funding for charging stations, and made EV charging infrastructure eligible for additional federal funding programs. Kentucky has implemented many incentive programs to encourage economic development in EVs, such as Alternative Fuel Manufacturing Tax Incentives, Alternative Fuel Production Tax Incentives, and EV Charger Grants. 

 Kentucky has witnessed $13.1 billion in EV investments since 2020, which is highlighted by a $2 billion investment by Ford for a new Universal EV Platform in its Louisville facility, and a $2 billion battery project by AESC in Bowling Green. 

The increased investment, production, and consumer demand for EVs demonstrates a growing shift in the type of vehicle that drivers will operate on Kentucky’s roads. As a result, it is imperative that Kentucky cities receive an equitable portion of the state's revenue generated from EVs.  

Electric Vehicles in the Commonwealth  

In Kentucky, state law defines an electric vehicle, under KRS 138.475(1), as any vehicle with plug-in charging capability, regardless of whether it is powered by an electric motor only or a combination of an internal combustion engine and electric power. Similarly to gas-powered vehicles, EV owners are required to pay an initial registration fee and an annual renewal registration fee.  

Under KRS 138.475, Kentucky motorists are required to pay an electric ownership fee. Motorists must pay $120 for electric vehicles and $60 for electric motorcycles. The fee is adjusted on the same schedule as the electric vehicle power taxes under KRS 138.477, except that the adjustment is rounded to the nearest dollar and cannot go below the initial baseline fees of $120 and $60. Under KRS 138.477, the adjustment is based upon comparisons to quarterly changes in the National Highway Construction Cost Index. In 2025, the current electric vehicle ownership fee increased to $126 for electric vehicles and $63 for electric motorcycles. 

According to the Office of the State Budget Director, in fiscal year (FY) 2026, Kentucky collected over $3.1 million in electric ownership fees. This was an increase of 0.5% from the previous FY total of $3.0 million. However, the fee has grown substantially since FY 2024, over 114%, when revenues totaled $1.4 million.  

The growth in EV ownership and renewal fee revenue coincides with the increased number of registered EVs in the state. According to data from the Kentucky Transportation Cabinet, total EV registered vehicles, excluding buses and diesel hybrids, totaled 120,724 vehicles in 2025. This was an increase of approximately 29% from the previous year. Since 2020, the number of registered vehicles has increased by over 81,000, an increase of over 200%. The table below shows the total registered electric vehicles by type from 2020 to 2025.  

Kentucky’s Municipal Roads:  A Connection Through the Commonwealth 

Maintaining Kentucky’s city streets is one of the most critical functions of city government. With 75% of all economic output occurring within Kentucky cities and over 10,000 miles of roadway maintained, ensuring Kentucky cities have safe roadways is essential.   

Cities drive Kentucky in a multitude of ways, and maintaining local roadways is crucial for the provision of city services and daily life. For Kentucky to continue to grow for future generations, it is essential that its cities receive an equitable share of the growing revenue from the increased ownership of EVs.    

Sources:
[1]
Akio Toyoda Shares Toyota's Strategy for Achieving Carbon Neutrality Through Battery Electric Vehicles (Toyota, 2021)

Toyota Charges into U.S. Battery Manufacturing (Toyota, 2025)

[2]
Driven by People, Powering the Future (Toyota, 2026)

[3]
Ford Follows Customers to Drive Profitable Growth; Reinvests in Trucks, Hybrids, Affordable EVs, Battery Storage; Takes EV-Related Charges (Ford, 2025)