On December 16, following months of intense lobbying from the automotive industry, the European Union opted to relax its de facto ban on internal combustion engines. This move grants automakers more leeway as they transition toward cleaner transportation solutions. Consequently, the acceleration of electric vehicle adoption in Europe is set to decelerate, bringing it more in line with U.S. policy directions. In the United States, the Trump administration has been in the process of rolling back automotive fuel efficiency standards established by its predecessor.

Under the EU's revamped proposal, the outright prohibition on selling new gasoline and diesel vehicles from 2035 will be softened. By mid-next decade, exhaust emissions will be required to decrease by 90%, rather than the initial target of a complete 100% reduction. The European Commission clarified on Tuesday that the amended policy will permit automakers to persist in selling certain vehicles powered by internal combustion engines, along with plug-in hybrid and extended-range electric vehicles. Nevertheless, automakers will be obligated to offset the extra pollution generated by utilizing low-carbon or renewable fuels, or by incorporating locally sourced green steel.