Tesla Executive Calls for Stricter Auto-Efficiency Rules

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A Tesla Motors Inc. executive called on rival automakers to put more compelling electric vehicles on the road and said fuel-efficiency standards should be far more stringent.

Most competitors “are focused on minimum compliance, lowest common-denominator behavior, and the vehicles reflect that,” Diarmuid O’Connell, vice president of business development, said Tuesday at an auto-industry conference in northern Michigan. He cited Tesla, Nissan Motor Co. and BMW AG as exceptions.

Automakers are under a U.S. mandate to boost average fuel economy to 54.5 miles (87.7 kilometers) per gallon by 2025. Those rules come under mid-term review in 2017. Tesla would like them strengthened, a move that would benefit the electric-car maker while pressuring traditional auto manufacturers.

Forrest McConnell, president of a Honda dealership in Montgomery, Alabama, and a former chairman of the National Automobile Dealers Association, countered O’Connell’s remarks by holding up a donut and broccoli as symbols of consumer choice. Donuts represent vehicles powered by internal combustion engines and are the overwhelming choice of buyers, McConnell said.

“At what point do you, at a societal level, have to think about the cost of selling people as many donuts as they want?” O’Connell said. “The cost of externalities -- foreign oil, climate change -- how do you price that into the market?”

The Tesla executive said that if federal mileage standards, which began in response to the 1973 oil embargo, had remained on their original trajectory of 4 percent annual improvements, vehicles today would average 75 miles per gallon.

“We’re living in a time of cheap gasoline, but this is probably an ephemeral event,” he said.

Tesla makes the all-electric Model S sedan and plans to introduce the Model X, a crossover sport utility vehicle, later this quarter. The Palo Alto, California-based company said it aims to sell 55,000 cars this year.

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