The demise of the ICE-powered sedan can be traced to the combination of three factors:
- EPA fuel efficiency standards
- vehicle safety standards
- UAW labor costs
Here's how it worked ...
1. The EPA fuel efficiency standards required auto manufacturers to sell a large number of compact cars in order to offset the lower fuel efficiency of large cars and SUVs.
2. However, the mandatory safety features made vehicles heavier, and it was more difficult to build small cars economically.
3. The combination of these factors, plus the UAW labor costs, made compact cars so expensive that the price differential between a compact and midsized sedan became very small.
4. Customers who saw a $25,000-$30,000 price tag on a compact car decided they'd rather pay $30,000-$35,000 on a midsized car from the same manufacturer.
5. The auto manufacturers were basically forced to outsource their compact car production to Third World countries and/or sell these cars at a loss in order to keep the prices low enough to make them attractive to U.S. buyers.
6. They finally gave up.
Makes a huge amount sense.