Trump Greenlights ‘Tiny Cars’ For US Production After Signaling Support Earlier This Week

• Trump announced on Truth Social that “tiny cars” can now be built in the U.S., describing them as inexpensive, safe, and fuel-efficient.
• The move targets Asia’s popular ‘kei’ cars, which are ultra-compact vehicles widely sold in Japan.
• Trump referenced his earlier White House comments this week, questioning how such cars would perform in the U.S. market.

President Donald Trump said on Friday that he has approved the domestic production of “tiny cars,” signaling a move to bring Asia’s popular kei vehicles to the U.S. market.

“Manufacturers have long wanted to do this, just like they are so successfully built in other countries,” Trump wrote in a Truth Social post. “They can be propelled by gasoline, electric, or hybrid. These cars of the very near future are inexpensive, safe, fuel efficient and, quite simply, AMAZING!!!”

First Trust S-Network Future Vehicles & Technology ETF (CARZ) edged 0.17% higher in morning trade. On Stocktwits, retail sentiment around the fund jumped to ‘bullish’ from ‘neutral’ territory over the past day as chatter increased to ‘normal’ from ‘low’ levels.

Regulatory Changes Open Door For Mini-Cars

Kei cars, known for their compact size and affordability, currently do not meet U.S. federal vehicle standards. “They’re very small, they’re really cute, and I said ‘How would that do in this country?’” Trump told reporters earlier this week at the White House, as he outlined plans to relax stringent Biden-era fuel efficiency standards.

Secretary Duffy told CNBC on Thursday that he is working with the National Highway Traffic Safety Administration (NHTSA) to “clear the deck” for domestic manufacturing. “Are they going to work on the freeways? Probably not,” Duffy said, noting that the tiny cars are better suited for urban environments and are more affordable than conventional vehicles.

What Is A Kei Car?

Kei cars are a major segment of the Japanese auto market, accounting for roughly one-third of all new-vehicle sales. “Kei,” which means “lightweight” in Japanese, refers to a tax-advantaged class of vehicles subject to strict size and horsepower limits.

Toyota Motors, Honda, and other manufacturers are expected to take advantage of the rule changes to build and sell mini-cars in the U.S.

Trump’s announcement comes after U.S.-Japan trade discussions included passenger vehicles, earlier this year. Japan showed interest in importing U.S.-made pickups and allowing Toyota and Honda to ship some U.S.-assembled vehicles back home.

U.S. equities were mixed in midday trade on Friday. The SPDR S&P 500 ETF (SPY) was up 0.24%, the SPDR Dow Jones Industrial Average ETF (DIA) rose 0.21%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) gained 0.44%. Retail sentiment around QQQ on Stocktwits trended in ‘bearish’ territory over the past day, while chatter rose to ‘normal’ from ‘low’ levels.

Read also: Meta Rekindles Publisher Partnerships As AI Race Intensifies Against OpenAI, Perplexity, Gemini: Report

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