Retail energy prices are subsidised. It isn't policy to encourage lower usage, the government is paying billions to sustain retail consumption (and yes, this is whilst another part of the government is driving prices higher).
The issue in the UK is that we moved to renewables that can't produce energy at the margin, marginal prices are still driven by gas, and we simultaneously decided to shut down large amounts of non-renewable sources of energy to satisfy the ambitions of politicians.
Result? Highest energy prices in the world, most energy-intensive industry shutting down, and massive reliance on political direction/regulators by industry (the original comment is not right, since the mid-2010s energy companies have been directed day-to-day by the state, invest in this project, don't do this anymore, etc. Our policy is made by people who wish the world was a certain way, reality doesn't matter to them).
> Retail energy prices are subsidised.
Retail electricity is taxed in the UK.
The car is clearly not the best way to navigate a dense city. It is impractical to have, say, tower block apartments and also have a car for each resident. It is unreasonable to build enough parking for peak time around every destination that anyone might want to go to.
On the flip side - not everyone wants to live in a dense city, and people's opinions on this change throughout their lives. It was profit maximising and also a lot of fun for me to live in the inner city in my early to mid 20's. Now that I can afford to not maximally push my career I prefer the outer parts of the city / more rural areas, and that's where the car shines.
If you look at the cost of living in an urban area it’s clear there is a lot of demand. Rural is cheaper because most people don’t want a long commute.