Politicians -- who as a rule are not noted for their intelligence -- can't seem to grasp the fact that people will use some of their greatest ingenuity to get around taxes and other government edicts. (Otherwise, socialist societies would crumble even sooner than they normally would.) Back in the mid-'70s, the feds decreed that every car have an ignition interlock that kept it from starting until every front-seat passenger buckled his seat belt. People quickly figured out how to thwart the interlocks and the mandate was abandoned after a year or two. In the early '90s Democrat "Lyin' Lawton" Chiles, who never met a tax he didn't like (and once proposed slapping the state sales tax on ATM withdrawals and other bank transactions) got the equally Democrat Florida legislature to impose a $295 registration fee on vehicles brought in from out of state. Immediately, newcomers stopped registering their cars here and held on to their old plates. It got so bad that cops were scouring business and apartment parking lots to ticket "foreign" vehicles. Eventually a Texan (!) successfully sued for discrimination and the state had to refund all that money.

(For the record, I avoided the fee by trading in my Texas-tagged Honda for a 3-year-old Toyota.)
It's a cinch that if those GPS units were forcibly installed on cars, a few technologically gifted drivers would soon learn how to disable and/or deceive them, and thanks to the Internet that information would be common knowledge in a matter of days.

Or drivers in border areas would simply cross the state line to refuel, if that resulted in a net tax savings. I used to routinely make big-ticket purchases n neighboring counties just to avoid this county's 1% sales-tax surcharge. (I don't do so as often now, since higher gas prices usually make the drive costly enough to negate the lower tax.

)
IIRC, Texas bases it annual license-plate fee on vehicle weight (at least it used to). That, IMO, would be the best way to both encourage frugality and fairly charge for wear & tear on the roads. Put a stiff surcharge on Hummers, SUVs and the like while giving discounts to motocycles & small cars. The revenue generated by the surcharges would be used for road construction & maintenance, the same as gas taxes.