What would you change about American emissions/fuel economy laws and regulations to both encourage more fuel efficient vehicles and stop having massive pickups/SUVs dominate the market?

Long winded sorry. TL/DR: The added cost to make small cars fuel efficient ruined the market as a whole and foreign companies can bring in mandatory fuel efficiency technology from home markets cheaper than US companies can develop it. You are not wrong on outcome but do lose some of the cause and effect here. Americans started buying less small cars/sedans, -> American automakers weren’t making money on small cars, ->American automakers stopped making small cars. -> if they started making them again today a large majority of purchasers would still buy foreign Toyota/German. All true! But. Americans started buying less small cars/sedans (because fuel economy/safety standards drove increasing prices for the small cars and for comparable prices they could get an SUV) -> American automakers weren’t making money on small cars (Because it was expensive to make them meet fuel standards and had higher margins on SUVs that didn’t have as strict standards) -> American automakers stopped making small cars ( because the American companies choose not compete with the foreign companies that already had/have to develop fuel efficiency for their own regions standards/markets and capitalize on the US specialty big SUVs) -> if they started making them again today a large majority of purchasers would still buy foreign Toyota/German. (Because those companies/vehicles have value in already developed technologies for the class making it impossible retain profit while being at competitive prices). It’s not ALL due to the regulatory impact. But you cannot ignore that impact. If ford offered a $25k 30mpg Taurus tomorrow, it would sell good numbers. But Ford would lose $5k on each one sold. Toyota can bring a 30 mpg engine (either physically or just the design) from Japan put in a Camry and sell it cheaper.