There’s been a long term trend toward bigger vehicles for decades. When gas prices locally went above 3.5-4$/gallon the trend reversed quickly. But it’s since returned.
It’s an arms race. It’s hard to feel particularly safe if there are significant fractions of mobile homes barreling down the road toward you. Owning the larger vehicles isn’t fun when you need to park for that matter.
I know about that trend in the US but I don't think that it's fuelled by the desire of having heavier cars. Cars getting heavier is a byproduct of cars getting larger. Heavy batteries don't bring that benefit.
Cars getting larger and heavier is a byproduct of environmental and safety regulations coupled with the consumers' desire for a constant amount of usable space and payload.
More exhaust cleaning and more complex motors cost weight. Sturdier frames are also heavier. Compare e.g. the door thickness of a modern car with one from the 1990s. You can also compare the door's weight. The door will be heavier for the modern car and the thickness will cut away more from the interior space provided (since exterior dimensions are somwhat "fixed" in perception per class of car). Sit in a 1990 era Golf1 and compare to a modern Golf7. The modern version is more cramped on the inside despite being larger on the outside. And it is a good deal heavier.
So yes, larger exterior will get you a heavier car, but it isn't really consumers wanting ever larger exterior dimensions. It is consumers wanting a constant interior usable space.
Mk1 Golf came out in 1976. The increasing size of the same model of vehicle is more due to brand loyalty retention. They know that in your teens and early 20s, you needed a cheap small car. As you get older, you may want more space to do more things, but you really loved your old car. So to keep you as a customer, they increase the size of the new versions of that car. The new car is still the same model as before, but now it meets your changing needs.
You will see that the Golf has gotten bigger, but now the Polo has taken over as the small car. The Civic is no longer a small car, and has been replaced by the Fit/Jazz. The Focus has gotten bigger, and the Fiesta has taken over as the small car. The smaller car still exists.
Compare a modern Polo to a Mk1 Golf. The Polo will be safer, quieter, more efficient, and probably not that much heavier. Same goes for any car that I mentioned above.
All correct but you forgot a few details from that list
A lot of interior space reduction for a given vehicle volume comes from the space required for a passenger cabin to have an aerodynamic shape.
More "wasted" space leaves more room for crumple zones, airbags, speakers, computer modules, HVAC stuff, alternative drive-trains and all sorts of features throughout the car.
Basically every engineering group in an OEM has their job made easier by making the car bigger. Making the new generation 1" bigger than the last generation is an easy way for management to please basically all the stakeholders.
Vehicles at the compact end of the spectrum are moving toward the design characteristics of 1950s heavy equipment where the operator sits where he fits and that's it.
Though some are looking at curb weight. On the consumer side, it's part of the marketing of vehicles like the Hummer. (On the production side, it's precisely why some vehicles have gone as close to the "commercial truck line" as they can get away with to avoid extra taxes, street restrictions, and license requirements.)
It’s an arms race. It’s hard to feel particularly safe if there are significant fractions of mobile homes barreling down the road toward you. Owning the larger vehicles isn’t fun when you need to park for that matter.