Veto does sound a bit strong. I gave him a budget and some options and asked what do you like. It's not like he threw himself on the ground crying when I suggested a hatch, he just said he likes the sedan more.
Meh, take the people suggesting just getting him a beater cause "screw it, he's just a kid and he's gonna wreck it anyway" with a couple extra pinches of salt. You have insurance, that is what it's for. If you aren't already, I would suggest framing this as a big long-term gift, or maybe an early graduation present. Something that clearly communicates to him a message of "this is yours, but it's a big and expensive gift, and one that will be yours for a long time (until he can afford a newer nicer car on his own), so you better darn well take care of it".
You could also make him pay for insurance if you aren't and definitely IMO pick up the deductible and any collision-induced costs he might cause
Also, I'd do the math on different deductible costs with your insurance. In my situation, having a $500 deductible instead of $1000 saves me money so long as I average one claim every 7 years or something. Probably not a big deal if you're 43 and drive a Camry, but to a 16 year old kid with a new zoom zoom mazda it's probably worth getting the lower deductible
And finally, props for looking at manuals. It's a valuable skill, I strongly feel it makes you a better and safer driver, and makes it less likely he will let his dumb buddies drive it and wreck it.