The boss of Ford has urged the US Congress to provide tax credits to carmakers to encourage them to invest in more fuel-efficient vehicles.
Bill Ford says people must be helped to buy energy-saving cars
Bill Ford said more action was needed to stimulate the development of hybrid vehicles and those powered by ethanol.
Mr Ford called for greater help for US carmakers to modernize their plants and for research and development.
In keeping with other US carmakers, Ford has been struggling to cope with falling sales and high labour costs.
Ford recently revealed plans to cut 4,000 jobs in the US.
Even so, credit rating firm Moody's said on Tuesday it could reduce the carmaker's credit status once more, citing falling sales of sports utility vehicles (SUVs).
Mr Ford, the great grandson of Ford founder Henry Ford and now the company's chairman and chief executive, said federal incentives were needed to boost innovation in the industry.
Consumers should be encouraged to buy more fuel-efficient cars, he said, while assistance should be available for carmakers to upgrade their factories and retrain their workers.
"Now, more than ever, I believe we must take action," Mr Ford said in a speech in Washington DC.
"If we put our heads together and keep in mind our shared interest in America's future, I am confident that we can innovate our way toward the right solutions."
Mr Ford is currently lobbying the White House to hold a summit to discuss fuel consumption and the country's future energy needs, something which officials said they were still considering.
Ford has pledged to raise its own game by increasing production of hybrid gas-electric vehicles tenfold by 2010.
Environmental experts said carmakers should only get financial aid if they could prove the public benefit of their plans.
"US taxpayers cannot afford to prop up companies that have basically done poor planning but we can afford to do it if we get something out of it," David Friedman, from the Union of Concerned Scientists, told the Associated Press.