U.S. Auto Industry Proposes Replacing Fuel Tax with Flat Vehicle Fee for Road Maintenance

John Bozzella, President of the Alliance for Automotive Innovation, recently called for eliminating the federal gasoline tax of 18.4 cents per gallon and replacing it with a uniform, weight-based vehicle fee to address the Highway Trust Fund’s funding shortfall. The Alliance, which represents major automakers including General Motors, Toyota, Volkswagen, and Hyundai, noted that the federal fuel tax has not been adjusted since 1993, and combined with the growing adoption of electric vehicles, this has significantly eroded revenue—leaving insufficient funds for road maintenance. The proposed new system would collect fees through a mechanism similar to vehicle registration charges, ensuring all vehicles on the road fairly share infrastructure costs. Several states have already implemented additional fees on electric vehicles, and with the current five-year federal transportation bill set to expire on September 30, discussions around reform are accelerating.