CAFE requires automakers to hit a fleet-wide average MPG target, but cars and light trucks are measured separately, and light trucks have always had a more lenient target. That alone gave manufacturers a reason to classify as many vehicles as possible as light trucks — which includes SUVs, crossovers, and pickups — rather than passenger cars.

It got more interesting in 2011 when the standards switched to a footprint-based model. Instead of a flat MPG target, each vehicle’s required efficiency is tied to its physical size — wheelbase times track width. The bigger the vehicle, the lower its individual MPG requirement. So making a vehicle larger actually made it easier to comply with the standard. Automakers had a legitimate regulatory reason to keep growing their vehicles.

Small sedans ended up squeezed from both directions. They fell under the stricter car standards, so they had to be genuinely efficient — which costs money to engineer — while also being low-margin products. A crossover built on the same platform could be classified as a light truck, face an easier MPG target, and sell for several thousand dollars more. The profit math just didn’t work for small cars anymore in the US, even if the same models continued selling fine in other markets.
So the steady growth in average vehicle size and the disappearance of small sedans from domestic lineups isn’t purely a consumer preference story — the regulatory structure played a real role in pushing the market that direction.​​​​​​​​​​​​​​​​