This doesn't really track. Sibling comment pointed out that the average new car transaction price is massively higher than before knobs were replaced with screens.

But more importantly... screens were put in more expensive cars first, and slowly trickled down to budget cars. It's a very weak argument that it was done for cost reasons. Screens are flashy and impress people during their 5 minute test drive. "Wow! Think of all the things I can do in my car that I couldn't do with a knob for changing fan speed." Sure, living with those screens tends to be a bit less enjoyable than those first impressions lead you to believe, but bright colorful animated screens helped to sell cars. If they're actually less expensive than knobs and buttons, that's just a bonus for the manufacturers.

Also keep in mind, when screens first appeared in (expensive) cars, they weren't actually cheaper than the knobs and buttons they replaced. Technology is, sorry was getting cheaper per unit of performance over time. Screens became commonplace and inexpensive to put in cars, but I suspect they were ten times more expensive than all the knobs and levers they replaced when they started appearing in luxury cars.

I saw cost savings trickle down to customers only in an economy textbook.

and we ended up with new cars being 2x expensive even after adjusting with inflation somehow

But nobody got cheaper cars. The shareholders on the other hand asked for a third yacht, and they got exactly what they wanted (after the car manufacturer fired the team which used to do usability testing for their interface)

Did they? No one buys cheap new cars, at least in the US.