I think this is a very very critical aspect to getting carbon neutral. If a functional drop-in motor is that cheap, and maybe 100 miles of range battery is another couple grand, you know what?
We should have a retrofit tax credit that basically covers that. All the beater cars that people commute with will stay in the market for another 15 years until truly cheap or second-hand EVs work their way through the system.
So why not give a massive distributed labor stimulus which will produce an army of grass roots worker familiar with the future drivetrain technology for the foreseeable future?
Make this practically free. $5000/car labor included. See what the market produces.
A big point against "cash for clunkers" is that it drains away the exact affordable transport that people at the poverty level need to survive. Regardless of the perverse incentives that led to rich people living in suburbs and commuting to the city, while poor people live in urban ghettos and reverse-commute to the suburbs, it's the way things are now.
And the rural areas aren't going to have functional public transport until self-driving becomes feasible in ??? years.
The fact is that modern ICE cars are pretty durable. They're going to last a long time, and the recent used car spike and component shortage will likely cause cars to stay ANOTHER 5 years longer than normal.