I don't understand some of this. Surely the overall diameter (wheel plus tyre) must remain the same for the speedometer to be accurate? The speedometer uses wheel revolutions rather than gps, presumably. So therefore the gearing must remain the same, mustn't it? The only difference I can see is that less rubber means, other things being equal, less deformation and consequently less energy loss. Carrying this to an extreme, if you had solid cart wheels on the car with just a wrapping of a strip of rubber then the friction losses would be minimal even if the ride would be intolerable.