They are wrong but there is a grain of truth to this. NTSA regulations about fuel efficiency and emissions are part of the reason that car manufacturers made vehicles bigger and more expensive. It is significantly harder to meet emissions standards and fuel efficiency standards in the US in a sedan or small compact car and on top of that car manufacturers know that people aren't generally buying compact cars for $80-150K so it's a win win for them. It's greed, and them gaming the system in order to use the fact that larger vehicles aren't beholden to the same emissions standards or fuel efficiency standards. So car companies convinced consumers they don't want small cars, that instead they want SUVs and trucks and perhaps crossovers. And they lobbied to game the system and to continue pocketing money doing it.
https://www.distilled.earth/p/the-loophole-that-made-cars-in-america