To limit emissions - for climate impacts or pollution - taxes need to encourage people to buy smaller, lower powered cars. Weight and drag from a larger frontal area are mainly what increases consumption.
Manufacturers will need to decide whether to pass their fines on to customers or absorb them (unlikely in the medium term).
Being purely objective (image, egos, boy racers etc aside) - there is almost no need for any car larger than a typical small family hatch.
Medium and long term It will encourage the move to EVs, and a 20mph (entirely plausible) limit in towns would allow smaller lower powered cars to prevail. Currently a typical car "payload" is 1 or 2 adults (+ kids?) totalling around 80 -200kg in a modest car weighing around 1200kg - not very efficient!
A few will want to tow caravans or boats, have larger families, need a 4x4 as they live up a track etc - like it or not they will be penalised for their choices.
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