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SAE 2013: Bob Lutz on Fuel Economy Regulations, “I Don’t Get It.”

Bob Lutz' Keynote Address at SAE World Congress on Fuel Economy Regulations
Bob Lutz’ Keynote Address at SAE World Congress on Fuel Economy Regulations

With all the talk about fuel economy regulations and building more fuel efficient vehicles, Bob Lutz explains that we’re attacking the problem from the wrong angle.

Everyone in the automobile industry by now is familiar with Bob Lutz, former chairman of General Motors, staunch defender of Chevy Volt, and moving force behind VIA Motors. In an address at the SAE [Society of Automotive Engineers] 2013 World Congress, Mr. Lutz explained his issues with fuel economy and carbon emission regulations that are forcing automakers to build and more-fuel-efficient vehicles. Yes, building these vehicles is absolutely necessary, as they reduce fuel consumption by design.

The problem is mostly psychological, because filling up at the pump doesn’t hurt us enough where it counts, in our wallets. Lutz explains that the laws of supply and demand work both ways, “…if you want someone to use less of a given commodity [fuel], you raise the price of that commodity.

How hard is that for anyone to grasp? Reducing fuel consumption by forcing automakers to sell smaller and more frugal vehicles is like fighting the nation’s obesity epidemic by forcing clothing manufacturer to sell only small sizes. If you want less obesity, then what you would do is you would raise the price of fatty foods.”

If Lutz had his way [and who says he shouldn’t?], raising taxes on fuel to typical worldwide levels would force consumers to choose more fuel-efficient transportation, be it electrified vehicles or smaller vehicles or public transportation, to increase their personal fuel economy and reduce carbon emissions.

Forcing this choice would give the automakers the market to sell those vehicles in, which is good for business since they’d be able to sell more vehicles. Following the economies of scale, this would be good for consumers because the price of advanced technology come down and make the vehicles more affordable. Finally, we could use the extra tax revenue to improve highway and transportation infrastructure.

What do you think? Does Lutz have a point?

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  1. Just compare the UK price to the US price, and you know he’s right. It’ll be a chocker, but it’s common sense everywhere else (except the Middle East off course).


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