Don't be intimidated by his threat of bringing in a lawyer. The fact that he even said that makes it even less likely that there will ever be a lawyer involved.
Your biggest worry should be him driving the vehicle you sold him and sustaining a serious injury that could've been prevented had you not been negligent. But since he already told you that a mechanic has deemed the vehicle "illegal to drive", that likely means he needed documentation from a mechanic to complete his registration with the DMV and he was unable to obtain that. So if he gets in an accident in that scenario, suddenly it could no longer be your fault, it could only be his.
If I were you, I would simply be nice and tell him you're not going to cover the repairs because you had already discussed the potential for necessary repairs prior to selling the vehicle. You made no attempt to conceal any potential defects and it's not your problem.
Caveat emptor and all that.
If he doesn't get a lawyer involved, you only have his ire to worry about. If he does get a lawyer involved, you'll probably just get served some papers from the lawyer and if it comes to that, depending on the cost, only then should you even consider paying him. And even then maybe you shouldn't.