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Where's the fun in that when consumers happily pay twice as much? There's no question you can make decent cars under 10K$. There are lots of those on the market in China. Most of them are pure electric of course because they are good enough, super simple to build, and inherently cheaper to make than anything hybrid. If you are competing on price, cutting cost like that is what you do.

Fiat 500 and Mini Cooper are certainly not tiny. I mean the originals from the 70's yeah but the new ones are huge and bloated in comparison.

Anyway such tiny vehicles do exist in Europe and Asia. The Citroën Ami (the new EV one) comes to mind in Europe, where it's had some success, but is still kinda expensive for what it is.

Those cars already exist, look at all the cars produced for the Indian market.