There is a fundamental truth you have to understand about car companies:They do not exist to make cars. They exist to make money. That distinction, analyst Kevin Tynan tells me, is why they’re not really interested in making affordable electric vehicles.
Perhaps that’s an oversimplification. Tynan is the director of research at an auto-dealer-focused investment bank, the Presidio Group, with decades of experience as an analyst at firms like Bloomberg Intelligence. What he means isn’t that automakers have no interest in affordable products. It’s that their interest begins and ends with winning customers who will eventually buy more expensive, higher-margin products.
One of the auto industry’s dirtiest secrets is that at scale, it doesn’t cost that much more to make a bigger, more expensive than a smaller and cheaper one. But they can charge you a lot more for the former, which makes this a game of profit margins and not just profits. In recent years especially, that’s a big part of why your new car choices have skewed so heavily toward bigger crossovers, SUVs and trucks.
Sorry, I got ahead of myself without clarifying. The idea of taxation based on the size of “stock” vehicles or even a stock vehicles estimated mpg was turned down because considerations such as: Vehicle Body Modifications, Vehicle Engine Modifications, 5th Wheels, Trailers, Poorly Tuned or Mal-Maintained Vehicles and many others listed means the end result would be a poor assessment for more than 2% of registered vehicles and thus resulting in not taxing appropriately.
So while they can do it (tax by size or empg) by pulling any data that the DMV or tax filings show, those considerations hamper the idea’s effectiveness in taxation for the California Department of Tax and Fee Administration (CDTFA).
As a result, Road Charge (mileage) was adopted in CA as the future replacement for the existing 7.5% + gas tax. https://caroadcharge.com/