There is some disagreement about whether this is actually the case. It takes a lot of resources to build a new car. Meanwhile the average passenger cars has been above 30MPG for 15 years now and the newer ones aren't dramatically better than that. So you only come out ahead with a new car if you put a lot of miles on it. But then that's still conflating "new" and "efficient" -- a 2004 Prius still gets better mileage than the new car average.

This doesn't apply to electric cars, which do use dramatically less petroleum (i.e. none), but they're mostly already made in the US, so making petrol cars cost more may actually be an environmental advantage because more people will buy electric.

People are driving drastically less.