Seems like all the new entrants would rather compete at the high end.

There's often companies willing to compete with small margins. For example, grocery store business is already known for small margins in the US, and one of the recent winners that's been expanding a lot is Aldi, which is known for its consistently low prices, so it's unlikely their margins are any better.

Economies of scale says before you can build a cheap car you must first be a large company

One possibility is companies that are already established overseas entering the US as a new market for them.