But the problem is regulatory. China already has a number of under $5000 city cars that are perfectly fine for driving around. Problem is that they're completely illegal in Europe or US.
We utterly need a category of city vehicles that are barred from highways, can be driven in cities, and lack 90% of all the newer and ridiculously expensive safety features. We're moving in a direction where new cars are mandated to read the speed limits indicators and follow them. Honestly I'm hoping this particular piece of news is bunk, but it definitely wouldn't surprise me - regulators love regulations, car manufacturers love having extra features to sell, and it's fool-proof protection against cheaper alternatives.
A city car needs safety belts, and a built in speed limit. That's it.