Not when government regulation favours larger vehicles (e.g. lower emission standards).

Self-interest strives to break (or break out of) competitive markets to one’s own benefit.

The idea that "capitalism" somehow magically makes everybody do exactly what any particular person or set of persons want to happen is fascinating. How could one arrive to such a conclusion? No, that's not how "capitalism" works. It does not guarantee that the things you want to happen magically will happen because "market".