“Reducing fuel consumption by forcing automakers to sell smaller vehicles is like fighting obesity by forcing clothing manufacturer to sell only small sizes.”
Let’s start with climate change, where Emperor Bob said, “I would insist on giving equal time to the growing scientific body that is not convinced that climate change is man-made and I would say, just leave room for honest debate. That’s what this emperor would decree.”
Once the “honest debate” starts, “This emperor would ask that the laws of common sense be applied. And in this case, the laws of common sense simply dictate – always has – that if you want someone to use less of a given commodity, you raise the price of that commodity. How hard is that for anyone to grasp? With all this complicated CAFE and CO2 legislation, we’re attacking the problem from the wrong end of the pump when we dictate that automakers make vehicles that go farther and farther on a gallon is wrong. What happens in the real world, as will always be the case, is people don’t buy smaller, more efficient vehicles and pocket the extra cash. People will continue to buy larger vehicles and spend the same amount of money on fuel because, mentally, they’ve got a sort of finite fuel budget and they think it’s a good deal.”
After all, he said, “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.” 
Fearless leader Lutz did offer a solution, which is to work with the market and introduce a gradual national gas tax increase, adding that, “only as emperor could you do that, because an emperor doesn’t have to run for reelection.”
In Emperor Lutz’s world, the national gas tax would climb 25 cents a year, and the money would rebuild infrastructure.
Politicians in Washington have often told Lutz that a higher gas tax is a “political impossibility,” which then begs the question as to why it’s not impossible in Europe? There, gas is $8 a gallon of which around $4 is tax. Lutz said, “Even though they have conservative parties in Europe, centrist parties, left-of-center parties, radical right, radical left, somehow, somehow the political systems in Europe are able to achieve consensus on the value of raising gasoline taxes, but in the United States they just can’t, even though it makes perfect sense.”
In Emperor Lutz’s world, the national gas tax would climb 25 cents per year, and he claims people wouldn’t even notice given the regular fluctuation of gas prices. Then, you would turn around and spend the extra money on things that would make them happy, like improving the highway infrastructure, fixing potholes and rebuilding bridges. The current situation is “an absolute embarrassment to the United States.” After a decade, you’d have gas prices in line with the rest of the world and “you’d get the US fleet to look exactly the way everybody wants it to look: small, efficient cars driving on pristine roads and crossing beautifully reconstructed bridges. But, the sad reality is that that’s not going to happen, because I’m not going to be Emperor.”
Which leaves the logic of the marketplace to bring about change. In his speech and the Q&A session that followed, Lutz pretty comprehensively deflated the argument for diesels in America. Despite the inherent fuel efficiency increase of around 20-25 percent, there are not a lot of diesel vehicles in the US, whereas half the cars in Europe are oil burners. Lutz cited the different regulatory diesel reality across the pond, which does make the fuel there cheaper than here, and includes the upcoming Euro 6 rules, which are are “nowhere near as tough as US diesel regulatory requirements. In the US, you need a lot more hardware in order to meet diesel emissions.”
“Diesel has a certain cachet in the United States as the intelligent way to save fuel, but it’s mostly psychological.”
“In the United States, even though Chevrolet has just introduced the Chevy Cruze with a diesel engine and there will be some people buying it and some people will buy Grand Cherokees with the 3.0-liter V6, but people are buying these and paying a premium price because they want interesting technology. The German high-end cars are available with diesel and that gives diesel a certain cachet in the United States as the intelligent way to save fuel, but it’s mostly psychological. Because here in the United States, first of all, you’re paying probably a $2,000 premium for base engine cost of a diesel over a gasoline engine. Then, you’ve got about another $1,500 to $2,000 worth of emissions hardware to clean up that diesel and get it past US emission regulations. So now you’re talking to close to a $5,000 premium to achieve a 20-percent mileage improvement and, guess what, you’re paying 20 percent more for a gallon of diesel than you do for a gallon of gasoline. So, in terms of out-of-pocket costs for the customer, you’re paying a $5,000 premium and paying exactly the same amount of money on fuel. So, I don’t get it.”
A lithium air battery would give a car like the Chevy Volt a 380-mile range, and “at that point, does anybody need an internal combustion engine?”
Since he was speaking at an engineering conference, Lutz said the automotive engineers will need to embrace an entire host of technologies, powertrains and materials so the of the future will not turn into “suppository-shaped, aerodynamic appliances” He sees lots of carbon fiber, lightweight steel and the “widespread hybridization of vehicles.” Lutz said he believes electric drive is the future – but he remains “very skeptical” about fuel cells – even though it will take longer than people originally suggested.
“About two or three years ago, there was exaggerated hype, exaggerated expectations and the media* made it sound like everybody’s next vehicle was going to be electric. We in the industry never tired of saying electric vehicles and partly electric vehicles have their place in the overall system, but if you look at the numbers compared to the total market, it’s very small. My guess is, world production of automobiles today is about 70 million units, annually. If ten percent of those are electric in 10 years, that would be pretty good progress. And if in 15 or 20 years, that number may rise to 20 or 30 percent, it would make electric vehicles a big industry.” Lutz said that new battery technologies will bring about a tipping point in EV sales. For example, a fully-developed, advanced, rechargeable lithium air battery would give a car like the Chevy Volt a 380-mile range, and “at that point, does anybody need an internal combustion engine?”
“I’ve got a Chevrolet Volt, and my lifetime average, in mixed driving, is 238 MPGe. But the EPA, by their formula, the Prius wins.”
Until those batteries arrive, we will continue to see full-size pick-ups, SUVs and sportscars, “they will just have to adopt partial hybridization” to meet emissions targets, Lutz said. “One of the ways to achieve the mileage targets, is to put in a smallish lithium ion battery pack that permits about six-seven miles of electric drive. Look at the Toyota Prius Plug-In. It has better fuel economy, 94-95 MPGe, with a seven-mile electric range** and then it’s all gasoline. And yet, with a seven-mile electric range, by the EPA numbers, it beats the Chevrolet Volt, with a 38-mile range. So go figure. I’ve got a Chevrolet Volt, and my lifetime average, in mixed driving, is 238 MPGe. But the EPA, by their formula, the Prius wins.
“If the automobile is going to continue to be the symbol of mobility and freedom, we need highways that you can actually drive on.”
Despite his attack on climate change, there were times when Lutz sounded a lot like your average treehugger, especially when he discussed mass transit, specifically local and intercity high speed trains and an “intelligent balance” between mass transit and the automobile. “If we had a high-speed bullet train between here and New York or here and Chicago or between Chicago and the west coast, a system of bullet trains like in Japan or France, I don’t think any of that would come out of the hide of the automotive industry. I think 80 percent would come out of the hide of the airline industry. As far as better mass transit in the cities, anybody who has fought rush hour traffic in a major American city, … it’s easy to convince yourself that mass transit makes a lot of sense.” Again, he pointed to Europe, where mass transit does not negatively impact auto ownership. “It may reduce the number of miles traveled per year, but if the automobile is going to continue to be the symbol of mobility and freedom that it is, we need highways that you can actually drive on.”
But don’t think he-who-would-be-Emperor is going to join Greenpeace any time soon. “Even though an honest scientific debate would include the many renowned scientists at major universities in the world who are climate change skeptics, even though that debate could throw CO2 regulations into a very different light and even though new fossil fuel discoveries are increasingly making America look like an island floating on a sea of oil, despite all those factors, the regulatory climate is what it is and will be what it will be, one that it seems will waste resources and artificially raise the price of energy.” He added, “If you are wedded to the CO2 religion and if you truly believe that unless we all start driving battery-powered cars very quickly the whole planet will melt down, if you really believe that then you don’t care about economic activity and will just push the agenda through.”
*Ahem.
**Officially, the EPA rates the plug-in Prius electric range at “up to 11 miles”.
