It's no secret that when gas prices
dropped early in the year and with the recession in full swing,
hybrid sales saw their first
drop in years. Faced with tough
new fuel economy restrictions, auto executives had come up with
all sorts of unusual suggestions -- such as cutting
crash testing -- but now had to puzzle over a new dilemma; what
if consumers don't want the higher-priced electric vehicles that they
plan to start flooding the market with in less that a year?
At
a special Reuters
summit in Detroit, numerous auto industry executives are cited as
suggesting that the government raise taxes on gasoline substantially
to spur the adoption of fuel efficient vehicles. States Tim
Leuliette, chief executive of privately held parts supplier Dura
Automotive, "In the United States, we're afraid to touch the
fuel price. 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."
He adds, "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."
Eight dollars-per-gallon gas?
The idea certainly sounds absurd. However, the idea of the
government pouring over $100B USD into the auto industry and
partially
nationalizing GM and Chrysler might have sounded ridiculous a
decade ago too.
Mike Jackson, chief executive of AutoNation
Inc., offered similar sentiments, complaining, "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."
He suggests a near term fix
of taxing gas to around $4 or $5 a gallon to help vehicles like GM's
2011 Chevy Volt EV grab marketshare. Jerry York, a former GM
board member and an adviser to billionaire investor Kirk Kerkorian,
concurred. He states, "Unless gas is $3.50 or $4 a gallon,
consumers are not going to want to buy those cars."
Hearing
such pleas for government intervention and taxation certainly seems a
strange one coming from the business sector, which normally argues
and lobbies for minimal government involvement. However, a
growing number of industry executives feel that a $25B
USD advanced technologies loan program and the expensive
cash-for-clunkers
program just aren't doing enough to boost the sales of clean
autos. The solution, they argue, is for the government to hit
consumers where it hurts -- in the wallet.
Some are suggesting
tax rebates at the end of the year for customers with hybrids and a
food-stamp-like subsidy for poor citizens. But at the end of
the day the general message is the same; tax fuel. Concludes
Dura's Leuliette, "Energy independence in this country
ultimately means that fuel has to be more expensive."