That being: energy is conserved by producing, purchasing, and utilizing this new generation of efficient vehicles.
In addition, its arguing about an antiquated red herring. It would be much more useful for them to take on the more modern postulate:
Firstly, increased energy efficiency makes the use of energy relatively cheaper, thus encouraging increased use. Secondly, increased energy efficiency leads to increased economic growth, which pulls up energy use in the whole economy. Thirdly, increased efficiency in any one bottleneck resource multiplies the use of all the companion technologies, products and services that were being restrained by it.
What they are trying to do is incite action by poking holes in an archaic--and flawed--explanation of an unintended consequence of a complex system. This doesn't mean that unintended consequences still do not exist; IOW, if Jevons 19th Century view is not totally accurate in our current context, it doesn't prove by contradiction that innovation & production driving economic growth will inevitably lead to less energy consumption. It just proves some grad students have more free time than ability to think abstractly.
In any case, whatever its impact may be, the system will take notice of the new conditions and evolve to grow & consume energy the quickest. Whatever paradox, postulate, theory, etc, that it takes to accurately describe that objectively observable trend, that is what the technophiles need to focus on shooting down on their pathway to Utopia.