GM CEO Calls for Gas Tax Rather than a Fuel Efficiency Mandate

In a June 2011 interview in Detroit News, General Motors CEO Dan Akerson said his company and his industry would be helped, not hurt, if consumers paid higher gas taxes. He suggested that a $1 a gallon increase in the gas tax is a way to encourage buyers to purchase more fuel efficient cars.

The current federal gas tax is only 18.4 cents a gallon, but Akerson said that he would not be opposed to an immediate 50-cent-a-gallon increase to take advantage of recent declines in gas prices. Although he concedes that this would probably make some of his Republican friends "puke," it would do more to help the environment than a federal government mandate of of 60 MPG.

Paul Ballew, chief economist at insurer Nationwide who was formerly a director of sales analysis at GM, said it's always been clear within the auto industry that given the choice between tougher fuel economy standards and higher gas prices, the latter is a better deal for the automakers.

However, it is very unlikely that Republican lawmakers would support such a move. "They're not going to get it though, because that would take a lot of sanity in Washington and we're not going to see that," Ballew said.

© 2011, Richard Matthews. All rights reserved.

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Americans Want Cars to get 60 MPG

According to a survey released on May 16, 2011, a solid majority of Americans want vehicles that are much more fuel efficient. The Consumer Federation of America (CFA) said its survey of 2,000 Americans found strong support for a government mandate of 60 miles a gallon by 2025. As reported in USA Today, “Cars would cost more, but respondents said they'd be willing to pay more as long as the higher purchase costs could be recouped in gas savings in 5 years.”

“Concern about volatile gasoline prices and support for higher standards is driven by the huge and rising bite gas expenditures are taking from household budgets—from less than $2000 in 2009 to more than $3000 this year,” said Mark Cooper, CFA’s research director and energy expert in a press release. “Pain at the pump, along with the country’s oil import dependence, has produced a growing consensus that the federal government should substantially increase fuel economy standards.”

CFA received the data from a poll by Opinion Research Corp, which shows that “62 percent of Americans support a federal mandate requiring automakers to meet a 60 mpg standard by 2025, a proposal the Obama administration is considering,” reports the Detroit News. “The fuel efficiency mandate already is scheduled to rise to 35 mpg by 2016 from 27.5 mpg for cars today.”

Government mandates will push automakers towards greener more fuel efficient vehicles like hybrids and fully electric cars. All the major automakers are already launching hybrid vehicles and fully electric cars are sure to follow. According to the CFA study, the general public appears to welcome the move. "We're talking about changing the trajectory of consumption," Cooper said. "The consumer is ready."

© 2011, Richard Matthews. All rights reserved.

Related Posts
GM CEO Calls for Gas Tax Rather than a Fuel Efficiency Mandate
Consumer Groups Push for a US Vehicle Standard of 60 mpg by 2025
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Independence Day 2010: Declaration of Freedom from Fossil Fuels
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Peak Oil
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