I used to be in the auto industry and it probably has nothing to do with regulations. It's a leap in technology, analogous to the jump from carburetors to elec

I used to be in the auto industry and it probably has nothing to do with regulations. It's a leap in technology, analogous to the jump from carburetors to electronic fuel injection. Specifically, there's been a huge advancement in turbochargers in the last ten years. Advances like water cooling, ceramic bearings, and ceramic wheels. Turbos are far more efficient, durable, and well behaved than they were just ten year ago. The massive advancements in turbochargers coupled with dual variable valve timing and direct injection means we can get huge amounts of efficiency and power out of the tiniest of motors. Customers want power and fuel efficiency, the government mandating it did little to enhance that. There's plenty of loopholes for auto makers to skew their mileage numbers and make regulations basically useless. The driver behind faster and more efficient engines was customer demand and the technology to make it possible.