U.S. Auto Industry Proposes Vehicle Fee to Replace Gas Tax
Why it matters: The U.S. Highway Trust Fund faces declining revenues, impacting funding for America's roads and bridges.
- Alliance for Automotive Innovation, representing most U.S. and foreign automakers, proposes replacing the 18.4% per gallon federal gas tax with a single, weight-based fee on every vehicle.
- John Bozzella, president and CEO of Alliance for Automotive Innovation, states that the current oil crisis highlights the need to "dump the gas tax" and implement a policy where every vehicle contributes to maintaining America’s transportation network.
- Electric vehicles (EVs) now constitute 2.5% of total light-duty vehicles in operation, with their market share of new sales reaching 9.6% in 2025, significantly reducing federal gas tax revenues.
- The U.S. Highway Trust Fund, responsible for road funding, faces annual bankruptcy and requires regular congressional backfilling because the gas tax, unchanged since 1993, fails to keep pace with inflation and increasing vehicle fuel efficiency.
The U.S. auto industry is proposing a new weight-based vehicle fee to replace the federal gas tax, arguing that the current system is unsustainable due to the rise of electric vehicles and declining revenues for the Highway Trust Fund. This shift aims to ensure all vehicles contribute to road maintenance, as EV sales are projected to increase further amid soaring gasoline prices.
