See, the EPA has a strange methodology that bases vehicle classes on interior size, and the Karma isn't exactly spacious inside (the upcoming Fisker Surf has more luggage space). As AutoObserver notes, since the Karma has less than 100 cubic-feet of space, it fits nicely into the subcompacts class. Go figure.
Like with the low drained-battery mpg rating the Karma gets – just 20 mpg – the Karma's potential customers probably won't care what the EPA officially calls this plug-in hybrid. But just imagine if someone were to cross-shop all the cars in the subcompact class: "Let's see, hon, should we get the Karma, the Bentley Continental Supersports or the Mitsubishi i?" Looks like this class has something for everyone.