Tag Archives: autos

Vehicle Miles Tax

Here’s a great idea with typically poor execution by the politicians. A vehicle miles tax.

The whole approach to this is wrong though. The White House issues a draft reauthorization bill that includes this idea but then promptly disowns the idea publicly. It’s like they are trying to gauge opposition rather than solve a problem.

First of all, if you are going to restructure the funding of road projects, you need to go all the way. Kill the gas tax. It’s not doing the job and, as it is, if we want to reduce gas consumption then gas tax revenue will be shrinking anyway. Remove the gas tax and replace it with a vehicle miles tax.

Secondly, why do we need to accompany this with a proposal for a spooky, big-brother-esque, tracking device in every car? Cars track their own mileage via the odometer. It’s already a Federal offense to tamper with odometers (see Motor Vehicle Cost Information Act, 49 U.S.C. Section 32704). Just require an odometer reading every year with vehicle registration. The States already have the resources in place to collect this information.

You are NEVER going to get people to accept an additional tax to pay for their roads. However, a substitute tax that presents a better funding structure and produces a tangible result (ie. better roads) will probably pan out. The number of miles driven, and thus the amount of demand placed on the infrastructure, will be proportionate to the funds collected.

The best solutions are often the simplest. What am I missing?

Ford Lowering Hybrid Costs

In an all-out effort to lower the cost of their hybrid offerings Ford has in-sourced (is that a word?) nearly all of its hybrid technology. Ford designed its own hybrid battery, which will soon start production in Ford’s Rawsonville, Michigan plant, as well as its own hybrid transmission, to be produced in Detroit.

Software development for the hybrids has also been brought in-house. The results? Costs on Ford’s newest generation of hybrids dropped by a cool 30%…

via Gas 2.0.

Speaking of hybrids, this is promising news. One barrier to hybrid car adoption has been the price premium. Make the price equal and you are on the way to a wider adoption of this technology.

I’m still not convinced hybrid is the endgame for automotive transport, but its certainly a step in the right direction.

Mazda Unveils All-Gasoline Engine?

Their new SkyActiv all-gasoline engine 2.0 liter, 155 horsepower will allow the 2012 Mazda3 to boast a hybrid-esque 40 miles-per-gallon.

via Gas 2.0.

Very interesting. I gotta admit that engines like these sure take the bang out of hybrids. In my opinion, hybrids just aren’t quite there yet. A diesel Jetta can beat out a hybrid… as could my 1987 Honda Civic SI that I purchased very used in 2004. I could pull 42 mpg out of that car.

Highway Reauthorization a “Jobs” Bill?

Chalk this up as a further example of the fact that Politics Trumps Solutions. Ray Lahood is plugging the need for a highway reauthorization bill.

The head of the nation’s transportation system said during a stop in Charleston on Monday that Republicans and Democrats in Washington could come together this year to pass a major new transportation bill.

Secretary of Transportation Ray LaHood said during a speech to a group of transportation officials that the Obama administration viewed the bill as way to put Americans to work.

Highway reauthorization shouldn’t be about creating jobs, it should be about maintaining and developing our transportation infrastructure. It’s great that there is the possibility of job creation, but our transportation infrastructure has problems that need solving.

American Transportation Infrastructure

The Economist has a good look at our transportation infrastructure and (lack of) innovation. You should read the whole thing.

A few highlights:

  1. According to the World Economic Forum America ranks 23rd for overall infrastructure quality.
  2. America’s road fatality rate is 60% above the OECD average.
  3. Total public spending on transport and water infrastructure is 2.4% of GDP
  4. In 2006, road taxes at all levels only provided 72% of the money spent on highways

These are symptoms. Symptoms of the problems plaguing our transportation infrastructure. It strikes me as self-defeating that the solutions being called for always involve more government. More taxes. More spending.

The article makes the following observations:

Petrol-tax revenues, for instance, are returned to the states according to the miles of highway they contain, the distances their residents drive, and the fuel they burn. The system is awash with perverse incentives. A state using road-pricing to limit travel and congestion would be punished for its efforts with reduced funding, whereas one that built highways it could not afford to maintain would receive a larger allocation.

and

Cost-benefit studies are almost entirely lacking. Federal guidelines for new construction tend to reflect politics rather than anything else.

Why then aren’t we looking outside the box? Let’s solve the problem, not band-aid the symptoms. The problem, in this case, is that Politics trumps solutions.

The article, however, does put forth some good solutions to the problem of disparate funding structures and the true costs being hidden.

Economists press for direct user fees. An early Obama administration flirtation with a tax on miles driven attracted little support, but some cities have run, or are thinking of running, pilot schemes. Congestion charges present another possibility. State governments have increasingly turned to tolls to fund individual projects, but tolling inevitably meets stiff public resistance.

Ah, now we’re talking. Use fees and tolls. Gas consumption fees do not correlate to road/transporation usage and costs. Pay for what you use. This, more than anything, will cause people to make the most efficient use of our resources and infrastructure.

Brazil To Hand Over Airports To Private Sector

“We want to combine the urgency of the works with public and private investments,” Mr. Palocci said.

via WSJ.com.

Remember one of the problems we’ve isolated, in government “politics trumps solutions.” When the government brings in the private sector to help expedite projects it is because it’s the only solution they can find to that problem.

Emirates Airlines Has Big Ambitions

“Emirates’ strategy is aggressive,” says Pierre-Henri Gourgeon, the chief executive of Air France, who complains that Emirates is siphoning off passengers from Europe’s traditional hubs. “Europe is at the center of the global aviation world. It’s the result of aviation history.”

via Emirates Airlines Has Big Ambitions – NYTimes.com.

Great article on the wild success and growth of Emirates Airlines.  The European carriers sound a little off their game… seeking their government’s involvement to help fight off Emirates.  If the market is telling you what airline they want to fly, and it isn’t yours, getting the government to intervene isn’t a very fair way to win back market share.  See what your competitors are doing right and do it better.  Serve the customer… the traveling public.

Flat Fee for Electric Cars?

How can lawmakers create a new system to maintain the transportation infrastructure that “makes more sense than what we have today?” Rep. Chris Reykdal asked.

via Wash. considers annual flat fee for electric cars.

Now here is a politician asking a smart question.  The question itself shows that this guy understands the unbalanced funding problem our transportation system has.  A flat fee for electric cars will only exacerbate that problem.