We'd be far better off if government weren't subsidizing the automobile at all. Subsidizing mass transit to ameliorate the effects of subsidizing the automobile makes no sense.
I don't think it needs to promote walking either. Most people are perfectly capable of understanding their own situations if we don't hide the costs and if they are allowed to learn from their own mistakes.
It would be proper to tax things that have negative effects that aren't paid for, such as pollution.
The main government subsidy for efficient automakers that I'd like to see is a commitment to purchase certain numbers of vehicles for federal fleets if they meet specific performance goals (including price). Same thing with state/local (possibly with some federal subsidy of local purchases of more efficient vehicles).
Ideally without specifying how to make them more efficient, just overall cost per expected miles/yr (which would probably give natural gas vehicles the best pricing right now).
And I'd be opposed to that. The federal government is so bloated, they probably have enough vehicles for the next ten years if they were to stop doing all the things not authorized by the Constitution.
Efficiency is not the only consideration when buying a vehicle. I, personally, don't want a vehicle that sacrifices safety for efficiency.
The government shouldn't be using pork or other inducements to bias the market towards one consideration. Consumers knows their own needs.
If government wants to promote efficient, it should start by being less wasteful itself. Right now its the worst example in human history.
I don't think it needs to promote walking either. Most people are perfectly capable of understanding their own situations if we don't hide the costs and if they are allowed to learn from their own mistakes.
It would be proper to tax things that have negative effects that aren't paid for, such as pollution.