The head of a group that represents nearly every major automaker is calling on the federal government to suspend an 18.4-cent per gallon tax on gas. In its place, they want a vehicle fee to pay for road repairs. The Alliance for Automotive Innovation represents BMW, Bugatti, Ferrari, Ford, GM, Honda, Hyundai-Kia, Jaguar-Land Rover, Mazda, McLaren, Mercedes-Benz, Mitsubishi, Nissan, Porsche, Stellantis, Subaru, Toyota, VinFast, Volkswagen and Volvo, along with a slew of other suppliers. Its head, John Bozzella, said in a proposal that the government should address the increasing financial shortfalls in the highway trust fun by imposing a single fee on every vehicle based on weight.
As more folks buy electric vehicles and more fuel-efficient cars, the gas tax — which hasn’t been raised since 1993 — hasn’t been able to keep up with road repair requirements. Since it’s not indexed for inflation, the tax has lost more than 60% of its value in real terms. From Reuters:
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.
While it does sound unfair that EV drivers get away with a comparable road repair tax, asking them to pay anywhere between $250 and $1,000 is pretty damn wild. The Electrification Coalition, an EV advocacy group, said that even $250 was unfair because the average gas-powered vehicle will cost its owner about $88 per year in federal gas taxes.
