I don't think the state of racing games is poor, it's just that they aren't as popular as they once were. And that's ok, I don't think we need a bajilion racing games coming out every year if they're gonna be shit. But to answer your question, I think right now, there aren't a lot of new games coming out that are new IPs, they're mostly a continuation of established franchises, and are mostly simulcade or full-on simulation racing games. I've been having tons of fun with Automobilista 2, for example.
But if you want to go a bit more in-depth:
On the arcade side, yeah, I suppose there aren't a lot of recent releases (maybe The Art of Rally? I think there was an Outrun-style game too?). But you still have Wreckfest, GRIP, and Redout 2. Oh, and Trackmania.
In the simulcade side of things (think Forza and Gran Turismo), there's Forza Horizon, Forza Motorsport, Gran Turismo 7, WRC 24 (could also be put in the simulation racing, to be honest), and the F1 games, which are yearly releases as someone already mentioned.
As for simulation racing games, there's Le Mans Ultimate, from the rFactor devs, and a new Assetto Corsa coming out. Automobilista 2 is getting updates pretty consistently, and iRacing is still going strong and getting new content. Oh, and BeamNG, which apparently turned into a full-fledged racing game?
If you want to play against each other, there's always fighting games, if you're into that. I'd recommend Guilty Gear Strive, Street Fighter 6, and Tekken 8, which are the most popular fighting games right now. There's also Mortal Kombat 1 but I haven't played it, so I can't comment on it.