Your "friend" is a moron. Sorry, he's stupid, dumb, slightly criminal and short sighted (did I miss anything). Here's some facts.
EVERY motor loses HP through the drive train. They don't all lose the same amount but with an automatic tranny in the mix you can safely bet on a 20% loss as a minimum. manual trannies don't rely on hydraulic pressure to maintain output shaft motion. they do still take power to run but a lot less. 15% is the commonly accepted figure for driveline losses to manual trannies. That figure may be higher or lower for either kind of tranny depending on how it's implemented.
HP is required to overcome the valvesprings, the viscosity of the oil, the resistance of air to being pulled on and pushed out and compressed and expanded and fuel pumped, and all that. When you get to driveline, the setups are required to be very heavy duty, and reliant on big metal gears. Spinning those takes power too.
Tell your friend to pony up to an automatic tranny with a torque converter attached and have him spin the torque converter until the output shaft is spinning at say... 1000rpm. When he gets tired and wants to stop, tell him that he can't be tired because autos don't take any power to run. Then hit him in the head with a tack hammer and call him a moron.
All in all, you should expect that your fuel system is providing enough gas to make 30-35% more power than you see at the ground and that all that power you don't see is USED UP by the process of just running. Tell your friend to take a couple anti-stupid classes at his local community college. I'd recommend basic math, chemistry and physics.
BTW, csledd, you'd win all else being even. His 06 may make 270 at the wheels bone stock but it also weighs a bit more than your 03. The 05+ cars do have the worst wheel hop I've seen in a long time. I think it's easy enough to fix with better springs, bushings and more sturdy control arms.
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