US Emissions Reform: CO₂ Regulation Drops, EU Unimpressed

Key Takeaways

1. The EPA proposed to eliminate CO₂ emissions standards for vehicles, reversing the 2009 “Endangerment Finding.”
2. NHTSA introduced a regulation to ease fuel economy standards, potentially lowering vehicle production costs.
3. These changes may lead to a resurgence of internal combustion engines, with manufacturers like Dodge continuing production of traditional engines.
4. Europe maintains strict CO₂ emission standards, promoting electric vehicle adoption to meet climate goals.
5. Diverging regulations between the U.S. and Europe could impact the global automotive market and the future of electric mobility.

According to Motortrend, on August 1, 2025, the U.S. Environmental Protection Agency (EPA) released a proposal to eliminate CO₂ emissions standards for vehicles. This would undo the “Endangerment Finding” established in 2009, which was the foundation for regulating greenhouse gas emissions in the transportation sector.

Changes in Regulations

Additionally, the National Highway Traffic Safety Administration (NHTSA) introduced a new regulation in June 2025 that alters the Corporate Average Fuel Economy (CAFE) program. The NHTSA states that this action intends to ease fuel economy standards and lower the costs of vehicle production.

These alterations might bring about a revival of internal combustion engines, as car makers will experience less pressure to transition to electric powertrains and update their model lineups. For instance, Dodge is currently planning to keep making the well-liked 5.7-liter HEMI V8 engine.

Europe Stays Tough

In contrast, CO₂ emission standards in Europe are still rigorous. The EU remains committed to ambitious climate goals, which will likely make it less appealing to sell vehicles that generate high CO₂ emissions, thus pushing European buyers to increasingly opt for electric vehicles.

All in all, it seems that the developments in the U.S. and Europe – especially with the new U.S. administration – are diverging, which could affect the global automotive market and specifically impact the future of electric mobility.

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