Auto industry executives aren't terribly popular these days, and they'll become less so now that some of them say the best way to boost fuel efficiency is to increase the gas tax.
They stepped on that third rail today during the Reuters Auto Summit in Detroit when they said $4 gasoline would do more to cut fuel consumption than the $25 billion federal program aimed at spurring the development of fuel-effieient automobiles. They noted that sales of the Toyota Prius spiked last year along with gas prices, but gave way to bigger, thirstier cars as gas dropped below three bucks a gallon. The national average price at the end of last month was $2.66 a gallon.
"The U.S. allows the price of gasoline to go back and forth across this line where the consumers don't care about fuel efficiency and where consumers do care about fuel efficiency," Mike Jackson, head of AutoNation Inc, the nation's No. 1 auto retailer, said, according to Reuters.
Gas at $4 or even $5 a gallon would do more to spur demand for so-called next-generation vehicles like the Chevrolet Volt than any policy initiatives, the execs said. "Unless gas is $3.50 or $4 a gallon, consumers are not going to want to buy those cars," said Jerry York, a former GM board member and an adviser to billionaire investor Kirk Kerkorian.
There's no way in hell a politician is going to call for an increase in the gas tax, which stands at 18.4 cents for the feds and varies by state. It's such a hot topic that when we raised it last year, we got some emails from people threatening us with bodily harm.
"In the United States, we're afraid to touch the fuel price," Tim Leuliette, chief executive of parts supplier Dura Automotive, told Reuters. "We've got to continue to raise taxes in the United States so that, by the end of the next decade, gas is about $8 a gallon in today's terms. What you have to do is do it in a manner that is slow enough and predictable enough that vehicle selection and choices by people over the cycle can be made in a logical way,"
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Photo: Flickr / ilmungo
