President Donald Trump’s recent pitch was simple and photogenic: tiny, inexpensive cars like Japan’s kei-class vehicles could bring down the sticker shock on U.S. lots. “START BUILDING THEM NOW!” he wrote after a meeting with auto executives, and the idea briefly sent car-industry chatter spinning.
But beneath the tweet-sized slogan is a stack of inconvenient realities. The conversation about “kei” cars — little four-seaters and micro-trucks that sell in Japan for as little as $8,000–$10,000 — is less about a single regulation and more about demand, profit incentives, road design and safety norms that differ sharply between the U.S. and countries where those cars thrive.
Why the idea sounds attractive
It’s easy to see the political appeal. The average new car transaction in the U.S. is hovering around $50,000. A fresh, new vehicle at a fraction of that price would matter to many voters and would give automakers a big headline to tout. On the surface, it looks like a policy lever: relax rules, nudge production, lower prices.
At the December meeting where Trump raised the idea, he also announced rollbacks in fuel-economy rules — a change Ford’s CEO framed as enabling investment in “affordable vehicles made in the US.” But as analysts note, regulatory clearing alone won’t make a market.
The market answer: Americans mostly don’t want them
Automakers follow customers. And customer preferences in the U.S. have shifted decisively toward larger vehicles. Compact car sales have plunged roughly 59% over the past decade, and subcompact sales have collapsed around 90%, according to Cox Automotive. Today only a handful of subcompacts remain on U.S. showrooms (think Nissan Versa or Mitsubishi Mirage), and many tiny models like the Smart car have vanished.
Ivan Drury, director of insights at Edmunds, told reporters that kei-style vehicles are “a niche of a niche.” Automakers make far more profit from pickups and SUVs — the F-150 family, for instance, has historically generated thousands of dollars in profit per vehicle — which makes a strategic pivot to low-margin microcars unlikely without a compelling business case. (For a reminder of how automakers squeeze extra revenue from specialized vehicle options and aftermarket kits, see how Ford has monetized enthusiast upgrades in recent years.) Ford’s approach to niche vehicle revenue
Safety and infrastructure: a mismatch
It’s not just taste. Kei cars were designed for environments where average street speeds are lower, roads are narrower, parking is scarce and multi-modal travel (walking, biking, transit) is more common. Japan’s urban speed norms and dense neighborhoods mean many microcars don’t need the same heavy crash structures required in the U.S.
Bringing unmodified kei vehicles onto American highways would force expensive engineering changes to meet U.S. crash and rollover standards. And even if regulators somehow waived those standards, drivers in cars that frequently travel at 35–45+ mph alongside 6,000-pound pickups present a serious safety concern. Streetsblog’s analysis argues that unless the U.S. reimagines its streets — lowering speeds, reconfiguring arterials, and cutting the dominance of large vehicles — kei cars would be both dysfunctional and dangerous here.
The fatality math is striking: Japan had about 2.1 traffic deaths per 100,000 residents in 2024; the U.S. was close to 13 per 100,000. Those figures reflect systemic differences in speeds, road design and modal share, not just vehicle size.
Import rules, the 25-year workaround and specialty buyers
There is a backdoor: Americans can and do buy kei cars through specialty importers, but there are limits. Federal rules allow vehicles at least 25 years old to be imported without meeting modern crash standards, so most legally imported kei cars tend to be vintage. Specialty dealers report steady, small demand — often from hobbyists, farms, colleges and businesses that want tiny utility vehicles for off-road or private-site use.
Automakers say the choice to build or import kei cars is driven by customer demand. Nissan told reporters it would consider adding types of vehicles if there were a strong market; Honda declined to comment. Meanwhile, some automakers are exploring small EVs for other markets: Ford’s small electric projects and Stellantis’s pocket Fiat show there’s engineering interest — but many of those models will be sold in Europe, where buyer expectations and regulations differ.
Politics, tariffs and the domestic supply chain
Even if U.S. demand appeared overnight, resurrecting a domestic microcar industry would be expensive. The parts supply chain in the U.S. is oriented around larger vehicles; small-vehicle components and the tooling for them are concentrated overseas. Trump's tariff and trade posture complicates importing any low-cost components, and automakers would have to swallow slim margins or find subsidies to make cheap cars pay.
There’s also a political twist: the same administration that now praises small, fuel-efficient cars has previously rolled back EV incentives and loosened emissions rules — moves that push manufacturers toward profitable trucks and SUVs in the near term.
A realistic pathway (if any)
If the U.S. genuinely wanted tiny cars to lower prices, it would take a package of coordinated changes: clear import paths for compliant microcars, incentives for low-margin affordable models, targeted investment in small-vehicle supply chains and, crucially, safer street designs that make low-speed microcars viable.
Absent that, the most probable outcome is incremental: a trickle of specialty imports and a few small EVs sold where demand exists (mainly Europe). Some automakers might import quadricycle-style EVs from Morocco or elsewhere when they see niche U.S. markets for them. For buyers who want ultra-cheap new mobility today, used compact sedans and older imports will remain the pragmatic choice.
The kei-car pitch is less a technical obstacle than a cultural and economic one. You can change rules with an executive pen; you can’t quickly alter what people want to park in their driveways or how streets are built. Even if minicar dreams become available, whether America embraces them will depend as much on the feel of its roads and wallets as on anything a president says.
For a glimpse at how niche products do find an American foothold — often inching in from enthusiasts and specialized channels rather than mainstream showrooms — look at how small brands have entered the U.S. market in other industries, such as ethically minded Fairphone’s measured entry into the States. Niche products sometimes take a slow route to mainstream
What’s likely in the next year: a lot more conversation, a handful of pilot projects and continued skepticism from automakers that have learned they make more money from bigger vehicles. If tiny cars do arrive en masse, it won’t be because regulations were waved away overnight — it will be because shoppers, safety engineers and city planners all change their minds together.