People "wouldn't even notice", the former GM executive claims

At the SAE World Congress "Action" Bob Lutz gave an entertaining keynote in which he slammed the effect that the CAFE standard is having on vehicle prices.  Mr. Lutz, former vice chairman of General Motors Comp. (GM), called CAFE "an absolute embarrassment to the United States" and suggested that the government should raise gas taxes by $0.25 USD/gallon a year for ten years instead.

The move comes on the heals of GM and Ford Motor Comp.'s (F) announcement that they were pairing to work on nine- and ten-speed transmissions to improve fuel economy.  GM and Chrysler are also looking to fuel efficient diesel imports to help boost its fuel economy, with GM's 2014 Chevy Cruze Clean Turbo Diesel and Chrysler's 2014 Jeep Grand Cherokee (diesel).

Mr. Lutz acknowledged some customers want these vehicles, remarking, "People are buying these and paying a premium price because they want interesting technology."

But the former executive says that electric vehicles will ultimately drive the industry to higher fuel efficiencies.  Mr. Lutz is a key evangelist of the Chevy Volt; in fact he still drives one to this day.

Bob Lutz loves the Chevy Volt, despite its struggles.

The Obama administration says that its target of 54.5 mpg by 2025 will add $2,059 USD to the average price of a truck and $1,726 USD to the average car price, but argues that customers will recoup these gains by using less pricey gasoline. By Mr. Lutz's math, though, the cost increase will be much greater.  He commented, "We're on the way to my [previous prediction of] $5,000.  If the government says $1,800, it'll probably be about double that by the time the cars hit the road."

"As I've said for years, reducing fuel consumption by forcing automakers to sell smaller and more frugal vehicles is like fighting the nation's obesity epidemic by forcing clothing manufacturers to sell only in small sizes," he added.

In his speech he also restated his concern that CAFE was compromising safety by increasing the use of lightweight materials with less structural integrity.  He commented, "In order to maintain ... styling, performance, appeal and not turn into rolling suppository - shape aerodynamic appliances, the car companies will have to do a lot of lightweight materials."

Bob Lutz
Bob Lutz @ his keynote [Image Source: Autoblog Green]

Mr. Lutz contends that his gas tax strategy would be fine with the public, who "wouldn't even notice" the change.  His proposal mirrors that of others, including a former advisor to President George W. Bush and GM's former CEO.  He comments, "You don't want to punish people for driving.  You want to give people the incentive to buy vehicles that use less fuel.  You would take the money and spend it on things to make them happy, by dedicating it to the radical improvement of the unholy mess of this nation's highway infrastructure."

He says that the magic bullet for fuel efficiency would be a battery electric vehicle with an hour charge time, the price of a gasoline vehicle, a battery pack the size of a gas tank, and a 400 mile range.  Current models are far from that dream target, though.

Sources: The Detroit News, Autoblog Green

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