
Electrification of the automobile brings with it some significant tax implications.
For one thing since costs of early models will be high, there is a government $7500 tax credit that buyers of the Volt will be eligible for.
However, some auto executives think even that isn’t enough. Proposed is a gas tax.
The idea is nothing new but the problem is at gas prices below $4 per gallon, electric cars are a hard sell to the mass population.
“Unless gas is $3.50 or $4 a gallon, consumers are not going to want to buy those cars,” said former GM board member Jerry York.
Currently, gas prices are around $2.66 per gallon nationally.
I can also attest that the traffic to GM-Volt.com nearly tripled during the gas price peak in Summer of 2008 when prices were greater than $4 per gallon.
“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,” said Mike Jackson, CEO of AutoNation Inc.
Jackson proposed a gradual increase of gas tax until an average price of $4 to $5 per gallon in reached.
Of course this idea isn’t popular, every politician sells hem or herself by pledging to lower and not raise taxes.
“In the United States, we’re afraid to touch the fuel price,” said Tim Leuliette, CEO of parts supplier Dura Automotive. “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.”
“Energy independence in this country ultimately means that fuel has to be more expensive,” Leuliette said.
Early adopters like us will buy the car for many reasons even if gas prices isnt one of them, but do you believe gas taxes should be raised to promote electric car adoption?
Source (Reuters)





