Autoblog

New CAFE standards will result in $65B in lost revenue for road projects

Aaron Richardson — Mon, 01 Aug 2011 08:29:00 EST

According to a new study by the American Road & Transportation Builders Association, new Corporate Average Fuel Economy Standards that mandate cars and light trucks average 54.5 mpg by 2025 will deprive federal highway projects of more than $65 billion in revenues.

That estimation is based on the fact that at-the-pump taxes levied on fuel are by law funneled to transportation projects. With mandatory CAFE fuel mileage increases, the amount of revenue collected from gas taxes will go down, which will cut into road revenues, the report says.

Of course, there are ways of circumventing that lost income, but all that will surely play out in the coming few years. In the meantime, click past the jump to see the report for yourself. Naturally, it's worth noting that the ARTBA, based in Washington, DC, is a group that represents the interests of road and construction workers.

Continue reading New CAFE standards will result in $65B in lost revenue for road projects

New CAFE standards will result in $65B in lost revenue for road projects originally appeared on Autoblog on Mon, 01 Aug 2011 08:29:00 EST. Please see our terms for use of feeds.

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Report: NADA chairman urges Fed to reconsider fuel rules

Zach Bowman — Fri, 22 Oct 2010 18:30:00 EST

Filed under: Car Buying, Government/Legal

The National Automobile Dealers Association has joined the ranks of those opposed to upping Corporate Average Fuel Economy standards to 60 mpg by 2025. The dealer group says that with fuel prices still low, consumers are more interested in horsepower and style than they are super-efficient vehicles. That means that if the federal government starts mandating ever more efficient vehicles that are significantly costlier to manufacture, dealers are likely to see sales falter as automakers have to elevate MSRPs to keep from losing their shirts. That's the fear of NADA chairman Ed Tonkin and his constituents. Tonkin should know - he himself owns a mutli-brand dealership in Portland.

Of course, Tonkin's argument hinges against further upping CAFE numbers hinges upon fuel prices staying at their current levels -- something that even the most optimistic minds are hesitant to believe. The federal government is expected to unveil its plan for increasing fuel economy standards early next year. So far, word has it that the Obama Administration is looking to impose an average of 35 mpg by 2016 and as much as 60 mpg by 2025.

[Source: The Detroit News | Image: NADA]

Report: NADA chairman urges Fed to reconsider fuel rules originally appeared on Autoblog on Fri, 22 Oct 2010 18:30:00 EST. Please see our terms for use of feeds.

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WSJ Column: Higher gas taxes better strategy than CAFE to save GM

Sebastian Blanco — Mon, 06 Jul 2009 18:30:00 EST

Filed under: Electric

2009 Chevrolet Cruze - Click above for high-res image gallery

Ford Executive Chairman Bill Ford and AutoNation CEO Mike Jackson were just two voices that spoke out in favor of a higher gas tax earlier this year. While we took the Cato Institute's Alan Reynolds to task for muddying the waters of the "Toyota-licensed hybrid Fusion", there's reason to look deeper at his argument (published in The Wall Street Journal) which maintains that a higher gas tax isn't just a good way to encourage sensible car purchases, it also stands to be helpful in saving troubled domestic automakers like General Motors. Reynolds writes:

The federal fuel tax is highest on the most efficient fuel (diesel) and below zero on the least efficient fuel (ethanol). Cars get about 30% better mileage on diesel than on gasoline, and cars running mainly on gasoline get about 30% better mileage than they would using 85% ethanol.

To stop distorting consumer choices, simply apply the same 24-cent-a-gallon federal tax to gasoline and ethanol as we do to diesel. This would add funds to the depleted federal highway trust. More importantly, it would remove an irrational tax penalty on buying diesel-powered cars -- arguably the most cost-effective way to improve mileage without reducing car size or performance.

Since GM, already on the government dole, sells (proportionally) so many large vehicles, it will need to sell more smaller or diesel-powered vehicles to offset its truck fleet and to meet upcoming CAFE standards. Reynolds doesn't think CAFE is a good idea, and claims there's a better way to make sure GM survives. Reynolds says that a higher gas tax would allow the Detroit automaker to keep building the cars it builds best ("midsize and large sedans, sports cars, pickup trucks and SUVs"). Only by upping the gas tax and totally scrapping CAFE, Reynolds says, will GM not be forced to take even more money to survive - and to pay the CAFE fines it's sure to acquire. Doing so would also allow The General to not waste "more taxpayer money on 'retooling' to produce unwanted and unprofitable subcompacts and electric cars."

Gallery: Paris 2008: Chevrolet Cruze

[Source: Wall Street Journal]

WSJ Column: Higher gas taxes better strategy than CAFE to save GM originally appeared on Autoblog on Mon, 06 Jul 2009 18:30:00 EST. Please see our terms for use of feeds.

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EDITORIAL: Attention Wall Street Journal - Ford does not use Toyota's hybrid system!

Sam Abuelsamid — Sun, 05 Jul 2009 15:10:00 EST

Filed under: Green

2010 Mercury Milan Hybrid - Click above for high-res image gallery

In a recent op-ed piece published in The Wall Street Journal, Alan Reynolds of the Cato Institute starts by making a few decent points about fuel taxation and fuel economy rules. Unfortunately, he undermines himself with some blatant errors and misinformation. In discussing how Detroit automakers will deal with new fuel efficiency requirements, he makes the all-too-common mistake of referring to Ford's hybrid system as licensed from Toyota ("Similarly, Ford has the Toyota-licensed hybrid Fusion and will soon produce the European Ford Fiesta in Mexico").

The reality is that Ford independently developed its own hybrid system at the same time Toyota was masterminding its own. The basic architecture of both systems is the same and both are based on the concepts developed and patented by TRW engineers in the late 1960s. When Ford introduced the Escape Hybrid, Toyota went after the Blue Oval for infringing on its patents. Ford had patents of its own on the technology that Toyota was using. Eventually, the two companies reached a cross-licensing agreement that gives both companies the right to build their own systems. Such cross-licensing agreements are common in these kinds of cases, but Ford did not use the Toyota hybrid system. The only other company that uses Toyota's system is Nissan for its Altima hybrid, and they actually buy hardware from Toyota. We continue deconstructing Reynolds' arguments after the jump

Gallery: Review: 2010 Mercury Milan Hybrid

[Source: Wall Street Journal]
Photos Copyright (C)2009 Sam Abuelsamid / Weblogs, Inc.

Continue reading EDITORIAL: Attention Wall Street Journal - Ford does not use Toyota's hybrid system!

EDITORIAL: Attention Wall Street Journal - Ford does not use Toyota's hybrid system! originally appeared on Autoblog on Sun, 05 Jul 2009 15:10:00 EST. Please see our terms for use of feeds.

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The NYT chimes in: time for a gas tax

Jonathon Ramsey — Sun, 28 Dec 2008 13:04:00 EST

Filed under: Government/Legal, Lifestyle

Can you hear that? Those are the war drums, and more and more of them are beating the same tune: bring on the gas tax. An editorial in The Gray Lady is the latest and arguably the weightiest to join the shock troops advocating for higher gas prices. The writer proposes a fluctuating consumption tax that would keep gas at least $4 per gallon in 2008 dollars, while an economist suggests a sliding tax on the price of a barrel of oil to achieve the same effect.

The NYT admits "a bitter recession is not the most opportune time to ratchet up the price of energy." But it balances that against the coming Obama administration's aims, the government's enviro-friendly suggestions to the U.S. auto industry, and Americans' claims to want to get off of foreign oil.

Although not mentioned specifically in the Times piece, some recommend a gas tax for a reason that has nothing to do with environmental stewardship: state governments need money. States are making enormous budget cuts, trying to sell and lease their lotteries, state parks, roads, bridges, and even their airports, and lining up for federal aid totaling hundreds of billions of dollars, and still saying they won't have enough money. The answer to "Will there be a gas tax?" could be, as Jesse Jackson once said, "The question is moot!" The question is not whether there will be a gas tax, but whether you will pay your additional taxes at the pump, at the toll booth, in your paycheck, etc...

[Source: New York Times]

The NYT chimes in: time for a gas tax originally appeared on Autoblog on Sun, 28 Dec 2008 13:04:00 EST. Please see our terms for use of feeds.

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