Accompanying Donald Trump’s decision to rollback emission standards in the United States were some interesting comments about his desire to see smaller vehicle options. He specifically praised the Japanese Kei cars he had seen during a recent visit, speculating that similarly small automobiles could lower the average cost of a new vehicle in North America.
“If you go to Japan, where I just left, and if you go to South Korea, Malaysia, and other countries, they have a very small car — sort of like the Beetle used to be with Volkswagen,” Trump told reporters on Wednesday. “They’re very small, they’re really cute, and I said, ‘How would that do in this country?’”
“But we’re not allowed to make them in this country and I think you’re gonna do very well with those cars, so we’re gonna approve those cars.”
The president then said that had directed Transportation Secretary Sean Duffy to remove the relevant barriers for the manufacturing and marketing of such cars in the United States. But the caveat to this appears to be that the White House wants the cars to be produced domestically.
Despite some pretty glaring differences in policy, Trump and Biden both stressed a need to bolster U.S. manufacturing. However, convincing Japanese automakers to produce Kei vehicles in the West would be a tall order. It’s very likely that the segment would be too small to rationalize setting up those factories to serve our market. Although, we have heard select European brands suggest that America should embrace some of their smaller models earlier this year.
At the same time, the chicken tax continues to guarantee that any preexisting, low-cost Japanese trucks (of all sizes) Americans have been clamoring for (e.g. Toyota Hilux Champ) would come with steep tariffs. Combined with emission standards that have ironically made automakers prioritize larger vehicles, the chicken tax effectively nullifies any chance for a small, foreign-made pickup to thrive on our market.
Trump’s most recent attempt to lower Corporate Average Fuel Economy (CAFE) requirements for automakers has been framed as a way to save consumers money. His past pitches to diversify vehicle options were presented in much the same way. Suggesting that North America needs to revise its rules to encourage more simple, affordable models can be produced has been a staple of his administration since 2016.
Unfortunately, the push to make that change hasn’t been given the same priority as revising emission rules. Most of the deregulation we’ve seen go through has pertained to giving companies leeway to test autonomous vehicles on public roads. Meanwhile, automakers have driven further into crossovers, pickups, and SUVs to exploit CAFE loopholes established during the Obama administration. With those presumably being removed as part of the fueling rollback, one could argue that some room has been made for more sedans and affordable compact cars.
But there is little reason for automakers to bother if they think they can upsell the public. Still, we’ve seen automotive sales experiencing a major decline this year. Average transaction prices are also now above $50,000, showcasing just how much MSRPs have ballooned since 2019 — when the average car cost about $13,000 less than it does today.
Americans are clearly ravenous for cheaper models and enthusiasts have specifically demanded less tech heavy options be imported from other markets. But domestic safety regulations and tariffs (many of which have only increased under Trump) have prevented this at a federal level. At the same time, numerous states have attempted to pass rules preventing citizens from importing old Japanese kei trucks.
Local bans and driving restrictions have typically been launched on the grounds that the small vehicles would be unsafe to use on American roadways. Kei trucks are certainly underpowered enough to make you want to carefully plan your route in advance and are absolutely dwarfed by modern SUVs. It’s hard not to feel vulnerable when you’re piloting one on public roads. But the same could be said of anybody on a bicycle.
Transportation Secretary Duffy has confirmed that he’s started working with the National Highway Traffic Safety Administration (NHTSA) to pave the way for extra-small cars to be manufactured domestically.
On Thursday, Duffy was interviewed by CNBC to clarify a few things. While he said that he believed the speculative little cars would be “much more affordable than the other options that are on the market today,” he also suggested that they probably wouldn’t work well on the freeway. He said he viewed them primarily as city vehicles, which we’ve seen have a hard time selling in the past.
This is often down to price, with my brain immediately jumping to the Fiat 500 as a recent example. Making a tiny car compliant with modern safety standards is expensive. By the time you account for import tariffs (since most of them come from outside the United States) any value proposition they might have originally boasted is gone and the same goes for their profit margins. Everything else comes down to regional preferences, as we know the market for micro vehicles is eager but ultimately small. Americans continue to appreciate larger models, even if the same cannot be said about their lofty MSRPs.
“The reason Japanese carmakers don’t make or sell Kei cars in the U.S. is business feasibility,” Bloomberg Intelligence senior auto analyst Tatsuo Yoshida said on the topic this week. “Pricing and costs don’t match.”
If you’re wondering how serious the Trump administration is about getting smaller and more affordable vehicles into American driveways, so are we. Some of the changes being made could very well encourage brands to diversify their lineups. But we still have a slew of importation tariffs that are clearly designed to protect domestic truck makers and no obvious reason why companies would set up factories for such a niche segment.
The narrow focus on Kei or super-mini vehicles may be misguided. While it is clear that many of today’s vehicles are just too large, Kei trucks haven’t become popular in America simply because they’re small. It’s also because they’re extremely simple vehicles that won’t break the bank and can be fixed in your driveway with basic tools. Many drivers have been turned off by connectivity features, high pricing, and persistent digitization of modern automobiles.
Duffy mentioned that automakers would soon be given permission to manufacture and sell ultra-small models inside the United States, naming Toyota specifically. However, it’s extremely hard for your author to believe there is more U.S. demand for the Toyota Pixis Truck (which is a 660 cc vehicle that’s smaller than a Mitsubishi Mirage) than the Toyota Hilux Champ (a rugged, simple, and affordable workhorse sized closer to the Ford Maverick).
Granted, the Pixis (which can also be had as a van, hatchback, or crossover) starts around $9,000 in Japan once you’ve converted it from yen to dollars. But the Hilux Champ tends to start around $13,000 on most markets, which is still about $16,000 less than you’d pay for a Ford Maverick and about $27,000 less than you’d pay for the most basic Chevrolet Silverado. However, it does lack a lot of the features that would be standard on the American pickups.
We shall see how all of this plays out over the coming months. The Trump administration moving to deliver on its longstanding promise to finally diversify vehicle lineups is undoubtedly a good thing. But it will be pointless if the plan is executed poorly or the resulting product mix ends up being silly.
Millions of Americans undoubtedly want simpler models that are priced and sized more reasonably than what’s on offer in 2025. But do millions of Americans want to drive around in pint-sized Kei vehicles when something smaller and cheaper that the status quo would probably be sufficient?
[Images: noamgalai/Shutterstock; Toyota; Art Konovalov/Shutterstock; Stellantis; Toyota]
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