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I think you are both right, but talking past each other.

While I think that there is little that can be done to speed the process, electric will be the way to go eventually. The modern internal combustion engine is extremely complex as is the rest of the drive train in a modern automobile.

So, yes the best movement for the buck is the short trip EV, this is why Toyota was able to sell the Prious, a complex hybrid, on paper a real Rube Goldberg machine.

And you are dead on, new car fuel economy has improved a lot in the last few years. This is due, like you said to people moving to the "right sized" vehicle for the mission.

It is also due to the car companies making it a priority. They have innovated in a lot of ways. The GDI system has allowed for much smaller engines to do a great deal of work and still improve the specific fuel consumption by 2 or 3 percent. (This is a lot!)

They have also cut a lot of corners. We have a Honda CRV, that was getting 28 mpg combined, until we put new tires on it. The fuel mileage dropped to 26 mpg, about 7 percent. We got a smoother quieter ride, but lost the fuel mileage. This is a big corner cut.

I am particularly interested in what GM did with the Traverse. They used it to woo a lot of customers away from the Yukon and for every customer that they moved they gained about 4 miles per gallon per vehicle sold. Most of the customers lost no utility, some that had major towing tasks did, and gained a lot of fuel mileage and comfort.

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