CAFE Or Gas Tax? How Best To Increase Fuel Efficiency.

The current government strategy to increase fuel efficiency is to mandate it through increases in the Corporate Average Fuel Economy standards, currently set for 35.5 mpg by 2016. In this piece, auto executives suggest a better way - using gas taxes.
November 9, 2009, 11am PST | Irvin Dawid
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When gas topped $4 a gallon, Priuses were not to be found on any of Toyota's lots. Now, not only are plenty of hybrids available, but light trucks are once again outselling the more fuel-efficient passenger cars.

"Mike Jackson, CEO of AutoNation, the largest automotive retail group in the U.S, suggests steadily increasing the gas tax until a gallon costs between $4 and $5 per gallon -- still far less than the price of gas in Europe. Jerry York, a former GM board member, agreed with Jackson's point. Both agree that the key is to gradually increase the fuel tax to slowly increase fuel prices..."

"What you have to do is to 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," said Tim Leuliette, CEO of parts supplier Dura Automotive."

From "Gasoline Price Causing Big-Vehicle Sales": "When the average gasoline price is $2.66 a gallon, according to news reports on the most recent Lundberg Survey, the message to the consumer is "Buy that big vehicle."

Thanks to Patricia Matajcek

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Published on Wednesday, November 4, 2009 in Automobile
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