"Frankly, it's time to move beyond exclusive reliance on historical regulatory approaches that clearly haven't solved these critical problems ... and move forward to embrace solutions that will yield the results that Americans expect and deserve," Wagoner said.

"For example, it has become increasingly clear that, of anything we can do over the next decade, biofuels have by far the greatest potential to actually reduce US oil consumption, reduce oil imports, and reduce carbon gas emissions," he added.

The appearance of Wagoner and counterparts Tom LaSorda of Chrysler and Alan Mulally of Ford drew a sharp riposte from environmental and consumer groups.

Mark Cooper, director of research for the Consumer Federation of America, said the fuel-efficiency target proposed by the domestic carmakers and Japanese rival Toyota was 30 percent too low.

"As Detroit's Big 3 and Toyota launch an astonishingly short-sighted advertising and lobbying campaign to block even modest improvements in vehicle fuel efficiency, it is time for Washington and Detroit to address the fact that our nation is needlessly losing the race to develop the best fuel-efficient vehicle technology," said Pam Solo of the Washington-based Civil Institute.

"Increasing fuel efficiency can simultaneously reduce our reliance on Middle Eastern oil, cut greenhouse emissions, save quality auto industry jobs and help build the US economy," added Solo. She cited surveys of potential voters that show 75 percent favor tougher emissions standards.

Detroit's automakers, however, remain dependent on sales of gasoline-guzzling pickup trucks and large sport utility vehicles (SUVs).

Jeremy Anwyl, president of Edmunds, which operates an influential Internet site widely used by car buyers, noted his firm's data indicates sales of large SUVs and pickup trucks are slipping as consumers react to rising gasoline prices.

At the same time, consumer visits to Edmunds site indicate sales of small cars will increase, he said.

GM's Wagoner appeared to be gearing up for the trend, announcing at the annual shareholders meeting Tuesday the award of two contracts for advanced development of lithium-ion batteries for its new Chevy Volt, a concept car introduced at the Detroit automobile show in January.

The Volt is being developed as part of GM's strategy to diversify away from petroleum, Wagoner said.

"The signing of these battery development contracts is an important next step on the path to bring the Volt closer to reality," Wagoner said.

"Given the huge potential that the Volt and its E-Flex system offers to lower oil consumption, lower oil imports, and reduce carbon emissions, this is a top priority program for GM," Wagoner said.

However, Anthony Pratt, an analyst with Price Waterhouse automotive consultancy, noted automakers face a real dilemma. The cost of new powertrains is only going up and consumers are reluctant to pay for them, he said.

GM also faces a serious image problem, particularly with increasing fuel-conscious Americans, GM officials acknowledged privately this week.

United Auto Workers president Ron Gettelfinger summed it up this way in a recent speech: "There's an impression among the car-buying public that the Big Three build nothing but gas-guzzlers, while Toyota is a division of Greenpeace."

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