But the incredibly regulated market also has its costs. A great example exists in China, which is currently experiencing a revolution in low-cost electric vehicles[1].
The low-speed electric vehicle revolution has exploded in China's countryside, so most people living in cities in China do not know these vehicles exist. The industry literally grew up while regulators in the cities weren't looking.
That article is worth taking in as a whole, for its implications are broad. First and foremost, this unregulated and illegal transportation revolution is becoming a means for China to remedy some of its severe pollution problems. Second, these networks of new manufacturers will become the experts in a manufacturing domain which will certainly have reach well outside of China.
In the US (and the West more broadly) we're progressively adding regulatory burdens to the auto manufacturing market, but little comprehensive cost-benefit analysis. This itself is a substantial inhibitor to innovation which might completely upend transportation as we know it.
For more really excellent discussion along these lines, I highly recommend Horace Dediu's Asymcar podcast[2]. Asymcar digs into the nature of the transportation market, its players, and the conditions under which transportation market disruption might arise.
[1] http://green.autoblog.com/2014/07/25/a-window-into-chinas-lo...
[2] http://www.asymcar.com/