By David Shepardson April 1 (Reuters) – The head of a group representing nearly all major automakers on Wednesday called for scrapping the U.S. government’s 18.4-cent per gallon tax on gasoline and replacing it with a vehicle fee to pay for road repairs. John Bozzella, who heads the Alliance for Automotive Innovation that represents General […]
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Auto industry group calls for scrapping US gas tax, adopting vehicle fee
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By David Shepardson
April 1 (Reuters) – The head of a group representing nearly all major automakers on Wednesday called for scrapping the U.S. government’s 18.4-cent per gallon tax on gasoline and replacing it with a vehicle fee to pay for road repairs.
John Bozzella, who heads the Alliance for Automotive Innovation that represents General Motors, Toyota, Volkswagen, Hyundai and other major car companies, said in a proposal first reported by Reuters the government should address the increasing financial shortfall in the highway trust fund by imposing a single fee on every vehicle based on weight.
Congress has not raised the federal gas tax since 1993 and as more Americans drive EVs and more fuel-efficient vehicles, gas tax revenue has not kept up with highway repair needs. Because it was not indexed to inflation, the tax has lost more than 60% of its value in real terms.
Bozzella said the fee would be collected like a registration fee. “This policy would guarantee every vehicle on the road contributes something to maintaining America’s transportation network,” Bozzella said. “Those driving older, less fuel-efficient vehicles or who travel long distances bear the financial burden. That’s not fair.”
Since 2008, more than $275 billion – including $118 billion from the 2021 infrastructure law – has been shifted from the general fund to pay for road repairs.
Many Republicans want to impose a fee on electric vehicles to help pay for road repairs.
Last year, House Republicans proposed a new $250 annual fee on EVs and $100 for hybrid EVs but it was not included in a massive tax and spending bill. The current five-year surface transportation law expires on September 30.
Some states charge fees for EVs to cover road repair costs. Some Republican senators in February 2025 proposed a $1,000 tax on EVs for road repair costs.
Most revenue for federally funded road repairs is collected through diesel and gasoline taxes, which EVs do not pay.
Last year, the Electrification Coalition, an EV advocacy group, argued a $250 fee for EVs was unfair since an average gas-powered vehicle pays just $88 yearly in federal gas taxes.
(Reporting by David Shepardson; Editing by Anna Driver)