Yes, the government mandates have driven many improvements in cars
but they've also driven up the price of cars at a rate substanically higher than inflation. Nothing is free. The technology improvement has been pretty dramatic. I was following a VW Beetle on the Interstate this morning. My 2001 CRV gets about the same gas mileage, emits only about 1/400th the air pollution, has 4 wheel drive for snow, is larger and more comfortable, has air conditioning and an automatic transmission, and is of much higher quality. Of course, that Bug probably only cost about $2000 in 1970 ($9216 in inflation-adjusted dollars), less than half of what I paid for my CRV.