The $25k car is going extinct?

It's pretty simple (in the US, can't speak for elsewhere).

There are 2 big factors at play:

1. Margins. Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck.

2. Normalization of debt. For many Americans, having a monthly car payment in perpetuity is considered acceptable. Car loans have their place and can be used responsibly, but due to marketing, sales tactics, and cultural sensibilities what often ends up happening is that people start from a monthly dollar amount and then work forwards to buy the most expensive vehicle they can, even if it means taking the loan term out to 72 or 84 months. It's also very normal for people to never pay off their car, instead trading in the vehicle after 3-5 years and rolling equity in the loan over to their next car. Obviously, this consumer habit is great for dealers, manufacturers, creditors and buyers of consumer debt, as well as the US Government and investors -- it's just not ideal for the consumers themselves if they're trying to preserve wealth and build savings.

These two factors create an environment increasingly hostile to the cheap entry level car. Consumer demand is low since most don't spend responsibly, and automakers don't really want to make or sell them because the margins are so slim.

In Europe, the average age for buying a new car is 50. This means that most of the cars sold are second-hand. Most people think that the car is a luxury and prefer to focus on their home first, then their family, and after that, their car.

I am from Brazil and although most cities are 100% built around cars, public transportation IS an option and mostly works and is (somewhat) affordable.

Unlike the US, if a place is 1km away as the eagle flies you can get there by walking ~1.5km max. And there are bus services and although often overcrowded or with low service, they do run and you can plan your life around them.

Yet everyone still buys a car as soon as they can afford one (or often if they can't). And they use it for commuting to work every day.

To get to the point that Europe is in where even rich people don't want cars or if they have one it is for weekend trips. You need to do a lot better than this.

Unfortunately getting the US to be like Europe in this regard is not really viable, but it could get to the point where Brazil is where the poorer people can afford to not own a car.

In some big cities in Brazil they do a lot of low-cost things like dedicated bus-lanes that actually make some high-demand trips shorter by bus. Progress in this area needs to be incremental, there is little point in investing crazy amounts of money in one big project. Instead the investing should be lower and constant.

sometimes one big project can make a big difference, like a new rail-bridge or metro. But in general getting people into busses is more efficient even if that means rich people still won't want to get into that bus.