How would we structure the deregulation incentives? For example how many cars per year before an auto maker is moved to the "regular" category and subjected to regular regulation? What level of fuel efficiency to trade off for what level of deregulation? And how far do we want to go in terms of cutting back on safety standard related regulation?
Simple. So long as a company stays privately held(like AC Propulsion, Commuter Cars, UEV), they shouldn't ever be forced to face any of the regulations of companies that are publically traded(GM, Ford, VW, Chrysler, Toyota, ect.).
However, the current case is very far from this. AC Propulsion, a privately held company, is currently bogged down by the same regulations any major automaker would face, and then some! Our government literally expects a small sub $1 million a year company to be able to pay $40+ million for repeated crash testing and NHTSA/DOT/EPA/ect. approval. Their TZero literally has to be registered as a kit car to even be road legal. Companies like Mosler and Caterham have to sell their cars as kits in order to sell them at all.
This is no accident. In the 1970s, small car makers started propping up like crazy in the US when the Big 3 refused to meet consumer demand for fuel economy and performance in the same package. The solution of the major automakers? Lobby the government and regulate the small companies out of existence. Then there were the marginally improved foreign cars, just one incremental step ahead of the major US automakers. The solution of the Big 3? Reagan-era import restrictions and fees!
Both things in conjunction subsequently doubled the price of automobiles(when you adjust for inflation), virtually eliminated 3rd party competitors, legislated the affordable featherweight sports cars of generations past out of existence(see: http://www.mulhollandraceway.org/MHR/issues.html), and produced an atmosphere devoid of any meaningful competition.
And the ignorant rednecks blame Nader to this day.
