When it comes to competition in the auto business, it’s the unknown that keeps the top U.S. Honda executive, John Mendel, up at night.

Mendel, speaking to the Reuters Auto Summit in Detroit, said he is always concerned about the conventional competitors. But what he is really afraid of is a company that “changes the game.”

“What keeps me up regarding new competition is someone significantly changing the game,” Mendel said.

People mention an autoseller taking up dealers dropped by General Motors, Chrysler or Saturn.

“What if they didn’t have a dealer network,” Mendel said. “What if they used big-box retailers and contracted with Jiffy Lube to have your car fixed?

“That could be a really new metric, which suddenly changes the whole cost structure for distribution significantly,” said the Honda executive.

That has been tried before, by Sears, in the 1950s, but was killed by the complex state franchise laws that protect dealership networks.

Would such an idea work if tried by the Walmarts or the Costcos of the world? Should the U.S. state franchise laws be changed to allow it?

Mendel was a featured guest at this year’s Reuters Autos Summit, which runs through Thursday in Paris and Detroit.

I wish I could report that “environmental reasons” were behind my decision to start commuting by bike. But the real motivation was much simpler: I’m a cheapskate and biking saves money.

Yet three years and some 24,000 kilometres after switching from the train to the bike, I’ve discovered a number of useful fringe benefits beyond being frugal and reducing greenhouse gas: the daily exercise from the 40-km round trip each day puts me in a good mood, makes me healthier, liberates me from the hassles of semi-reliable train timetables and makes me a bit lighter as well.

No matter how lousy or stressful or full of irritations the work day might have been, by the time I’ve arrived home on the western fringe of Berlin from the city centre after an almost always enjoyable 50-minute bike ride, I feel transformed back into a happy human being. It’s magic.

Rain is a pain. And strong headwinds can be annoying. But even if I get soaked I still usually arrive home with a smile on my face — unperturbed even if some @&%?”$! motorist nearly ran me off the road. In the morning on the way to work, the bike ride often transforms my sleepy head into one spinning with ideas.

I got the idea, for instance, for this feature (click here) on the way to work one morning while backed up behind more than 40 other bikers at a traffic light. Peter Kupisz, the friendly lawyer quoted in the story, told me he thrives on the feeling of the wind blowing in his face. “On some days it feels sort of like I’m galloping on a horse through the middle of the city,” he said. I know exactly what he means.

The only drawback to my cycling habit is that I usually have to switch to the train when roads and bike lanes turn icy or are covered with snow in January and February. Being locked up in packed train carriages is not exactly conducive to being in a good mood by dinner time — so my family looks forward to March even more than I do. “Why don’t you ride your bike to work?” is a comment I sometimes get from my wife during those winter months. What she actually means is: “You’re in a rotten mood, go away!”

What I’ve noticed over the last two years is that the number of bike commuters has been growing steadily, and not just during the summer months. The main boulevard through the centre of Berlin is sometimes packed, seriously packed, with hundreds of cyclists on their way to work. It’s an amazing sight and reminds me of scenes from the 1979 movie Americathon when everyone in Los Angeles is riding bikes on the freeways instead of cars because the world has run out of oil.

Admittedly, what makes this bike commuting in Berlin all a bit easier is the good fortune that we have a shower in our building. It would certainly be a bit more difficult without that.

This being the environmental blog, I decided to figure out how much CO2 saved by riding the bike about a total of 8,000 km per year. If I drove the car that distance instead it would be about 1,280 kg of CO2, according to this online carbon footprint calculator . If I took the train, it would be about 320 kg of CO2 per year. On bike, the calculator says it’s 0 kgs of CO2. But I’m not sure how to quantify any accidental emissions of methane.

Reducing CO2 is obviously a noble aim, but the more important saving is to my bottom line. If I were to drive the 8,000 km to and from work in a car each year, it would cost about 730 euros and use 560 litres of fuel. If I were to buy an annual pass on the train, it would cost 670 euros. Aside from the occasional flat tyre, biking doesn’t cost anything after the initial investment.

If any further arguments on behalf of bike commuting were need, I could mention the calories burned. This calculator estimates 880 calories burned per journey — or about 1,500 calories per day. One final advantage: in Germany, the tax laws allow you to write the distance of your commute off your taxes. So, incredible as it may seem, I actually get paid by the government, or more accurately by other taxpayers, for biking to work. It doesn’t matter if you drive, bike, walk or hitchhike to work. The annual tax writeoff for a 40-km commute is about 1,400 euros.

More and more people in many places around the world seem to agree that biking is the way to go, as my colleague Chang-Ran Kim noted in her blog (click here). As much as I liked the film Americathon, I just hope the bike lanes don’t get too crowded too soon. Getting stuck in a bike traffic jam might just wipe that smile off my face by the time I got home.

PHOTO: Erik Kirschbaum on his bike to work REUTERS/Claudia Roszak

In Germany, where many consider their cars sacred and most politicians on both the left and right refuse to consider tampering with the unlimited speed on the Autobahn for fear of hurting the car industry, the leader of the Greens party said it is high time for the country to join the rest of the civilised world and put an upper limit on Autobahn speeds — if for no other reason than to cut CO2 emissions

“The speed limit on German motorways will happen because it has to happen,” Cem Oezdemir, co-chair of the environmental Greens, said in an interview (click here for full story). “There will be an Autobahn speed limit as soon as the Greens are in power. We simply can’t afford it any longer to ignore any chance to reduce CO2 emissions. The interesting thing about a speed limit is that it would have an immediate impact on emissions. It would also save money, save lives and reduce the number of horrible injuries resulting from high-speed accidents. When you think about, it all the arguments speak in favour of a speed limit.”

Oezdemir, 43, said that aside from the powerful car lobby — which opposes a speed limit for fears it would damage the marketing mystique of carmakers like Porsche, BMW, Mercedes and Volkswagen — there are precious few reasons for letting cars continue drive at speeds of up to 200 kph and more: “The only argument against it is the pre-modern masculine dream of racing their cars at high speed.”

A study by Germany’s environmental protection office (Bundesumweltamt) found that a speed limit of 120 kph would lead to a 9 percent reduction in Germany’s CO2 emissions — practically overnight. It would also cut emissions of other pollutants by up to 28 percent. Greenpeace estimates that Germany could cut its CO2 emissions by some 40 million tonnes by 2020. There are speed limits of 130 kph on about half of Germany’s 12,000 km of motorway network. On unlimited sections cars often travel at speeds of up to 200 kph and some even reach 290 kph.

Some environmentalists reckon that CO2 reductions from cars worldwide could be even more substantial over the longer term. If consumers around the world were to stop buying the heavy, powerful cars built to race on German motorways and instead buy smaller, lighter and more fuel-efficient cars that aren’t built for such high speeds, emissions would not only be cut in Germany but in many other countries as well.

Germany, the world’s sixth largest emitter of greenhouse gases, likes to think of itself as a leader in the fight against climate change. But is that just hot air? Chancellor Angela Merkel, herself a former environment minister, has ruled out a speed limit: “It will not happen under me,” she said

As a number of foreign leaders have pointed out how can a country that refuses to introduce a speed limit to make a significant cut in its greenhouse gas emissions be taken seriously?

PHOTO: Cem Oezdemir, co-leader of Germany’s Greens party. REUTERS/Kai Pfaffenbach

“I hope the next three months will be better for you than the last three," Czech ambassador Jaromir Novotny told a gathering of Japanese car importers last month.

The way things are going, he'll be hoping against hope.

In April, Japan introduced an “eco-car” tax incentive that has left all foreign car brands such as Volkswagen, Mercedes-Benz and BMW, neatly outside the fence of eligibility.

It’s the last thing they need in a market that’s already full of quirks that make life difficult for non-Japanese car brands: the existence of a huge and unique 660cc microcar segment, convoluted recycling laws and stringent regulations against what type of materials can be used in fuel tanks, to name just a few.

No one is complaining about incentivising low-emission cars. But what rankles outsiders is that the perks are based on an outdated fuel economy testing method that critics say is a poor reflection of real-life driving.

“It’s so far from reality that we never bothered to tune our cars to get good readings under this method,” an executive at a European carmaker told me. “And now they’ve hit us with this eco-car tax and even if we wanted to make the adjustments, it would take us until next year to be ready.”

Japan’s mileage test is based on cars with engines already warmed up, a very slow acceleration and a top speed of just 70 kph (43 mph) --  slow even for Japan, where the speed limit on highways is 100 kph.

The differences mean Toyota’s third-generation Prius gets listed fuel economy of 38 km/litre, or 89 mpg, in Japan, but only 50 mpg in the United States.

Granted, that still beats anything in its class hands down, but there’s another catch: fuel economy and emissions standards in Japan are divided into nine different weight classes, and designed in such a way that a relatively big car with a smallish engine scores well in each category.

Unfortunately for European cars, that’s pretty much the reverse of their general strategy for Japan: “a big, sexy engine in a small car relative to its weight”, as one industry expert described it to me.

To be fair, it wouldn’t be the first time that a country formulated its regulations to suit domestic companies.

But there must be questions when a Volkswagen Golf, known the world over as a fuel-efficient car, doesn’t qualify for the green tax rates when a big, honking van like Toyota’s Alphard does.

Photo credits: REUTERS/Christian Charisius; REUTERS/Lucas Jackson

The feds are taking on California’s plan to limit tailpipe emissions of greenhouse gases and discussing the idea of low carbon fuel, but California has one other major idea to curb vehicle pollution, says the state senator who pushed through the tailpipe emissions law, Fran Pavley. The idea: drive less.

“No matter what we do on the clean car regs, with the gross of the state… and the sprawl out into the suburbs and the rural areas, we are going to be going in the wrong direction. And that’s something the federal government hopefully will eventually look at — land use,” she said by phone, when asked about next steps for vehicle pollution.

2008’s Senate Bill 375 by Darrell Steinberg set up targets for coordinated planning of transportation, land use and housing with regional reduction targets for greenhouse gases. At the time the bill passed, California was expecting its population to rise to 46 million by 2030 from 38 million.

Photo by REUTERS/Larry Downing

Has it come to this in California? Is the Golden State really banning black cars from its famous freeways, as reported in various auto industry blogs – and even The Washington Post – on the grounds that they require more air conditioning to cool?

The answer, a slightly exasperated spokesman for air quality regulator the California Air Resources Board tells Reuters, is an emphatic “NO.”

CARB spokesman Stanley Young calls the story a “very unfortunate case of misinformation from the blogosphere” stemming from proposed draft regulations that have since been put on the back burner by the agency.  But even those draft regulations, he says, never contemplated a ban on black cars.

Young says the report being circulated on the Internet was released in February as the board mulled over proposals for reducing greenhouse emissions from vehicles, including one that automakers make their cars more reflective — with the goal of reducing the amount of air conditioning used by drivers and passengers and, in turn, the amount of fuel consumed and greenhouse gases produced.

He says the draft regulations would have required a more reflective glazing on car windows and paints with a higher “reflectivity.” But he adds, flatly:  “This regulation did not propose banning or restricting any colors.”

“We wanted to see if the principle of reflective paints, which are now used on homes and buildings, could be applied to cars,” Young says. “We did some extensive research and examined all the possibilities and in the end we discovered that darker colors presented a problem.  And because at this point we didn’t have a solution that was cost-effective and technologically feasible, in this round we’ve decided to focus instead on the windows. We’ll address paints down the road.”

Young says the board may bring back car paint proposals in the next few years, perhaps when technology improves.

And that should come as a relief to all those limo-loving movie stars in Hollywood …

(PHOTOS: REUTERS)

Tesla Motors unveiled the Model S, its newest all-electric car, at a media event outside Los Angeles on Thursday afternoon. Billed as the first mass market highway-ready electric vehicle, the Model S can seat five adults and two children and can go for up to 300 miles on one charge. And, it costs a lot less than Tesla’s Roadster sports car, starting just shy of $50,000 (including a government tax credit). Check out our full story about the Model S unveiling here.

At the event, executives drove the prototype vehicle around the parking lot and into the surrounding neighborhood to show it off. We shot video of some of that, and here it is (forgive us for the guy walking into our shot!). Let us know what you think. Would you buy this car?

Volkswagen’s U.S. chief ruffled some entrepreneurial feathers on Thursday when he told a group of business school students at UCLA’s Anderson School of Management that  it will be 35 years before electric cars make up a significant portion of the world’s auto market.

During his prepared remarks, Volkswagen Group of America CEO Stefan Jacoby outlined the German automaker’s view that fossil fuels and traditional combustion engines will be with us for many years to come. VW, however, is committed to making them vastly more fuel efficient. The company is also investing heavily in so-called clean diesel technology, which reduces tailpipe emissions of climate-changing greenhouse gases while still giving cars their “fun-to-drive” pep.

“At Volkswagen we are taking a long-term and a short-term approach, and the short-term approach is not electric vehicles,” Jacoby said. “We can have cars on the road that have fuel consumption of 50, 60, 70 miles per gallon. That can happen in the next ten years.”

For electric cars to make economic sense now, gas prices would have to be about $10 a gallon, Jacoby said, attempting to underscore the high cost of electric vehicle technology.

“May I ask how many of you guys can afford a Tesla?” Jacoby asked, referring to the company behind the $109,000 electric Roadster sports car.

During the Q&A session, Jacoby was taken to task for his position on electric cars by some of the audience members, particularly a man who said he drives an EV that is partially powered by the sun.

Jacoby didn’t back down, but he did encourage the audience to take a longer view.

“I’m not saying that the final solution couldn’t be electric cars,” he said. “What I want to bring over to you guys is please, lower your expecations. There are a lot of improvements we can do with less money than putting all our available investment money into one solution.”

Photo credit: Reuters/Fred Prouser (Jacoby talks at the Los Angeles Auto Show in 2008)

As a top-flight racing driver, Britain's Science Minister Paul Drayson may seem an unlikely critic of the auto industry.

The self-confessed "car nut" owns a motor racing team and competes in a 200mph Aston Martin in competitions around the world.

 But at a news conference in London, he attacked the "significant minority" of auto industry executives who he claims still deny the evidence for climate change.

 "It shocked me that those views were held by senior managers," he said. "I have been actually quite surprised...(by) how many of them just do not accept the scientific evidence around climate change. It really shocked me."

 Climate change is "the greatest challenge of our generation", he added, and the problem is bigger than the global economic crisis.

 Pressed by reporters to name the doubting managers and their companies, Drayson declined and said the sceptical attitude was not confined to the car industry.

 He had met industrialists in all sectors who have yet to be convinced that human activities contribute to climate change.

 Car makers around the world say they are committed to reducing emissions blamed for contributing to global warming and are working hard to make their products more environmentally friendly. Battered by the economic downturn, they say they need more state aid to switch to electric and hybrid cars.

 While Drayson accepted that many in the car industry do accept the evidence for climate change, he said it was crucial to persuade the rest of the grave threats that lie ahead.

 "What we need to do is present them with the evidence to say this can't wait," he told reporters at the Royal Institution, an independent charity devoted to scientific research.

 Part of that evidence will come, he hopes, from a new UK-based coalition that will use satellites to monitor the Earth's climate, sea levels and atmosphere.

 More than 100 scientists from 26 British universities will work for the National Centre for Earth Observation, studying some of the biggest environmental questions.

 Its director Alan O'Neill said it will be a "vital tool in measuring and managing the health of the planet". It could help see where earthquakes or volcanoes are likely to occur next, he added.

 "This research is of vital importance," Drayson said. "It is very hard to look at this data and still maintain the position that climate change isn't happening."

Last week, we paid a visit to startup car company Aptera at its headquarters in Vista, California, just north of San Diego. Aside from talking to company executives, we also got to take a ride in the ultra-efficient, spaceage vehicle. Check out our complete coverage of Aptera here.

To say that the egg-shaped car, which the company will begin shipping to customers later this year, stands out on the road is a major understatement. Take a look for yourself in the video below, and let us know what you think.

Would you buy a car like this? The final price for the two-seater is expected to run between $25,000 and $40,000, and the all-electric version gets a 100 mile range per charge.