BMW works hard to avoid gas-guzzler tax

BMW AG hopes to get out from under the gas-guzzler taxes that are tacked on to the sticker prices of some of its high-performance models in the United States.

Jim O'Donnell, president of BMW of North America, says the company is studying fuel-efficiency improvements that could eliminate the gas-guzzler taxes on its vehicles as early as the launch of their redesigns in the next few years.

The 2010 550i GT incurs a $1,000 gas-guzzler fee, for example. The 650i convertible faces a $1,300 tax. And buyers of the 2010 750i pay $1,000, on top of a base price of about $82,000.

"We'd like to get away from it across the entire line," O'Donnell told Automotive News after a presentation Tuesday at the CAR Management Briefing Seminars in Traverse City, Mich. "It's something we don't want to be labeled with. I think we can get there with small improvements."

The graduated gas-guzzler tax is prompted by a model's failure to achieve the minimum fuel efficiency of 22.5 mpg.

BMW's smaller competitor, Infiniti, moved its new-generation M56 sedan out of gas-guzzler status this year. It did so despite increasing horsepower from the previous-generation M sedan, which competes directly against the BMW 5 series.

But BMW is protective of its image as a maker of luxury, sporty cars, and it is not clear just how far the automaker might go to sidestep the tax.

BMW's racy M5 gets just 11 mpg city/17 mpg highway and incurs a $3,000 tax. But that 5.0-liter, V10-powered sports car is at the heart of BMW's image.

Yet BMW is taking surprising steps with its product line. O'Donnell noted that the company will debut a small electric car, currently called the Megacity Vehicle, in China in 2013.

The company has not said where else the electric car will be sold.

By Lindsay Chappell- Automotive News