The principle issue with "tiny cars" is NTSB safety regulations. Just because a car weighs 900kg and can go 50 miles on 20lbs of lithium batteries does not mean that it doesn't have to stand up to an F150.

Back in like '06 or '07 Popular Mechanics took Honda to task over the fact that in 1989 you could buy a CRX HF that would get 80mpg whereas in '07 a Gen 1 Insight could barely hit 70 with a trunk full of batteries. They were all "what happened why do you suck now, maaaaaaan" and Honda was all

bitch we added four airbags six crumple zones two low speed bumpers an antilock braking system and a partridge in a pear tree.

2008 Honda Jazz, the most popular car in the world at the time:

Exact same car, North American market:

The difference between a Fit and a Jazz was dozens of body panels, subframe work, a relocated engine, different electricals and, in the calculation of one poor ricer who did the conversion just to be all JDM about it, an easy $15k worth of parts (aftermarket). That's entirely about American crashworthyness standards. Now, of course, Honda Jazz are Honda Fits because Honda sold enough in the US to go "okay we're all Americans now".

The Chinese aren't going to do that.