Yes, you’ve got it right. “on the freeway” part is correct. If a vehicle spent most of its time at constant speed on fairly straight roads, a larger tire would indeed improve fuel efficiency.
Real life driving though is mostly accelerating, braking, turning and that is where higher friction, greater moment of inertia etc work to reduce fuel efficiency. Properly sized tires also balance driving habits of most people with the engine output curves. If larger tires make a driver use more accelerator and drive the engine harder – this also reduces fuel efficiency.
The biggest factor in driving fuel efficiency is the organ that sits between the ears of the driver. Larger or smaller tires make a difference but not as much as driving style and attitude.
Accelerating slowly, anticipating when to slow down, keeping at speeds under 90km/hr etc do far more for fuel efficiency.
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