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The $5000 car is a fantasy. And they'd never sell in the US... Federal regulations or not.
I've driven several $7k cars. No AC. No power. No crash safety. No towing capacity. And they can't climb a steep grade with a full load (of four passengers, elbows-in-armpits) at more than a snail's pace. Top speed? Somewhere between 40 mph and fuhgeddaboutit. With suspensions that bottom out every time you fart and the possibility of the car swapping ends in a corner if it hasn't rolled over, first. (My various near-death experiences in cheap cars over the past several years would fill an entire chapter of my unwritten memoirs).
I've only driven a single $5k car. That was fun. It had three wheels, a 250cc thumper that drank both oil and gasoline in copious amounts (a Mirage drinks less at idle) and tended to overheat if you drove at more than 50 mph.
Not even the Chinese buy them, any more.
People already refuse to buy "small cars" in the United States because of fears over "safety", even if they can hit a brick wall at 40 mph and keep you more alive than in a 60's boat crashed into that same wall.
How many of them are going to buy cars that can't even survive hitting a pedestrian at half that speed?
The long and short of it is: Manufacturers can build cars that meet Federal Safety Standards, give you more useable space and power than pre-fed Yank tanks, and cost some $5k or more less than what they sell now.
That they don't is because buyers like luxury. The moment Americans, en masse, stop spec'cing everything with an automatic transmission and steering audio controls, perhaps then you'll be able to buy "bare minimum" cars again.
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