Currently automobile regulations push companies to make larger cars because they are easier to get past EPA regulations and safety tests, we should either lower standards across the board to make smaller cars easier for manufacturers to build or raise the standards of larger cars to be more inline with small ones.
This would also allow companies to make cheaper models for low income families, there is no reason we can’t have small sedans priced around $12,000-15,000.
Cheaper cars will also let people buy hybrids cost effectively, instead of paying $10,000 more for a hybrid the difference might only be $5,000, meaning the gas savings will actually save you money over time.