You have done what you need to do and now you just need to stick with it. It is not easy to take away the driving privileges since it is synonymous with independence. Once the car is taken away... to another location... leave it there. What you don't need to do is spend any time explaining to him where the car is. He will not understand and it only upsets him. When he ask about the car just say it's sill impounded. Then offer him some ice cream, turn on his favorite TV show, have to go to the bathroom... anything to distract him. If he says he's angry about it assure him that you understand his anger and you will see if you can get in touch with the appropriate people after lunch. Validate, distract and delay but don't argue or explain. His time line is confused so he doesn't have a clue how long the car has been gone. All he knows is that it is not there in the moment. So just keep making those excuses, validating that it must be frustrating, give him a little hope by telling him you are trying to "work on it", and then distract him.
I did this with my Dad for... YEARS!!! The AC was being fixed for months! I did give him his key, since the van was 3 hours away, and many times he though since the keys were in his pocket then the van had to be close by. This went on and on even after we sold his van. He did get agitated from time to time about the van not being there. Sometimes he just needed to be agitated. But it was in the moment and if I could find something to distract him all was good. I never explained that he couldn't drive or that I was taking away his ability to drive. I just went with the moment and gave the best simple excuse I could for the van being unavailable. Yes, I validated his frustration and told him I was "working on it". Sometimes he was ok with it and sometimes he pitched a royal fit. But what I never did was allow him to have that Van back in the same city with him.
The first rule of Alzheimer's is never argue with them. Give them quick simple answers, validate their emotions, give them a little hope, and stay the course!
Just know that eventually this desire to drive does wane. This very situation was when I understood the statement that it has to get worse to get better. As Dad's disease progressed, he forgot that he had a van or his desire to drive. But even in the end, occasionally, he would ask about the van. I just smiled and went on to something else
Welcome to the board. It's not an easy journey but it is doable. Hope you continue to post. There are many of us here that are on the same path you are on. You are not alone