Despite the upcoming oil shortage, the government is giving a special tax cut to businesses that purchase large trucks and SUVs. If gas prices are going to keep climbing, auto makers will have a harder and harder time selling these behemoths. So why don’t they sell more smaller cars instead? Because big SUVs are the only vehicles that make a profit.
Dan Lienert writes for Forbes.com that automakers lose money on cars that sell for under $30,000. This information is hard to come by: “At one time, we did have info from the dealers on what they sold,” says Mike Greywitt, of J.D. Power and Associates. “They were indicating how much profit they were making on each car. It’s not being made public now.”