- Alliance for Automotive Innovation called for end of federal gas tax.
- The group proposes replacing it with a one-time, weight-based fee.
- Organization is backed by a number of automakers and suppliers.
The President and CEO of the Alliance for Automotive Innovation has called for eliminating the gas tax, amid soaring prices due to the war in Iran. This is notable as members of the organization include BMW, Ferrari, Ford, GM, Honda, Hyundai, Jaguar Land Rover, Kia, Mazda, McLaren, Mercedes, Mitsubishi, Nissan, Porsche, Stellantis, Subaru, Toyota, Volkswagen, and Volvo.
In a lengthy post that was spotted by Reuters, John Bozzella said the spike in gas prices will likely drive consumers to more fuel-efficient vehicles like hybrids. This has been an ongoing trend and he noted hybrids represented 19% of all sales in January.
More: Congress Wants EV Owners To Pay New Fees As Gas Taxes Stay Frozen
He says this presents a problem as it will likely “accelerate the insolvency of the Highway Trust Fund,” which is responsible for building and repairing America’s highways. The fund relies on an 18.4 cent per gallon gas tax, which has remained frozen since 1993 when gas averaged $1.11 per gallon.
Adjusting for inflation, the tax should have been raised to 42 cents per gallon. However, politicians don’t have the backbone to increase it as any such move would prove highly unpopular with voters. Instead, they pour money into the fund by other means.
On top of that, EVs don’t use gas so they don’t even pay into the fund. Fuel efficiency has also increased significantly since 1993 and that’s a problem when the government gets paid per gallon.
A number of states have run into similar issues and they’ve rolled out new fees, many of them targeting EVs. Bozzella is also calling for change, but he proposed replacing the federal gas tax with a single fee based on vehicle weight.
While he doesn’t say how much the fee should be, it could penalize heavy vehicles like trucks, SUVs, and EVs. However, the final math would be up to Congress to figure out.
Bozzella brought up the issue as the current surface transportation bill expires on September 30 and Congress is discussing a new five-year plan. As we’ve previously reported, they’re looking at $500 to $550 billion in federal funding that looks to extract money from EV owners.
There have been various proposals as some members of the House favored a $250 annual fee, while Senators liked a one-time fee of $1,000. However, given the political climate, any legislation faces an uncertain future.
