MobilityNotes 5-Min Monthly Read - January 2026

MobilityNotes 5-Min Monthly Read - January 2026

The January 2026 edition of MobilityNotes brings together key developments across transportation policy, emissions regulation, electrification, fuels, engines, hydrogen, and smart mobility.

This edition highlights NHTSA’s reset of fuel economy standards, Europe’s proposed changes to the 2035 tailpipe CO2 standard, EPA and CARB heavy-duty emissions updates, India’s air quality concerns, major EV market shifts, renewable fuel policy developments, hydrogen investment, and emerging smart tire technology.

Policies, Regulations, and Reports

NHTSA has published a Notice of Proposed Rulemaking resetting CAFE standards for Model Years 2022 to 2031 passenger cars and light trucks. The proposal builds on NHTSA’s earlier interpretation that factoring in EVs resulted in overly stringent standards. The new rule changes vehicle definitions and requires only a 0.25% to 0.5% annual fuel economy improvement through 2031.

In Europe, the Commission has proposed a more pragmatic adjustment to the 2035 0 g/km tailpipe standard. Instead of a 100% reduction in tailpipe CO2 emissions from passenger cars starting in 2035, the proposal suggests a 90% reduction compared with a 2021 baseline, with offsets through green steel and renewable fuels.

The EPA has confirmed that the 2027 heavy-duty NOx emissions rule will take effect as scheduled. The rule requires more than an 80% reduction in NOx emissions, along with tougher durability and warranty requirements.

CARB has also outlined new pathways for reducing emissions from heavy-duty trucks through its “Drive Forward” workshop. Key ideas include alignment with EPA Low NOx rules, incentives for early adoption, CO2 and NOx credits for ZEVs, real-world testing methods, continued trailer standards, and non-exhaust emissions standards for brakes and tires.

The newsletter also looks at India’s air pollution challenge, explaining why official AQI systems cap readings at 500 even when pollution levels may be much higher. Delhi’s PM2.5 levels remained far above WHO recommendations, and the article highlights the transport sector’s role in urban pollution.

Electrification

Ford is pivoting from the all-electric F-150 Lightning to a range-extended electric vehicle version, citing declining EV sales, high losses in its Model E division, and the end of federal EV incentives.

BYD surpassed Tesla as the highest BEV seller in 2025, selling around 2.25 million battery-electric vehicles. BYD’s affordability remains a major advantage, with its BEVs priced significantly lower than Tesla in China and Europe.

Nio has discontinued production of its 150 kWh semi-solid battery pack after limited demand. Although the battery promised ultra-long range, customers preferred smaller 75-100 kWh packs due to cost and the availability of Nio’s battery-swap network.

India has issued new Battery Pack Aadhaar guidelines to create a digital identification and traceability system for batteries across their lifecycle.

China is also moving forward with connected vehicle policies while reducing NEV purchase tax exemptions from 100% to 50% starting January 1, 2026. Automakers have warned that this could slow EV market growth, while Level 3 autonomous vehicle testing and commercialization are expected to accelerate.

Fuels and Engines

The European Commission has launched a Sustainable Transport Investment Plan to scale renewable and low-carbon fuel production for aviation and shipping. The roadmap supports ReFuelEU Aviation and FuelEU Maritime targets and estimates a need for around EUR 100 billion in public-private investment.

FuelsEurope is calling for renewable fuels, including advanced biofuels and e-fuels, to be formally recognized in EU CO2 standards for cars and vans. The group proposes a carbon correction factor to account for the share of renewable fuels used.

Clean Fuels Alliance America is urging the EPA to finalize the delayed 2026-27 Renewable Fuel Standard rule and fully reallocate Small Refinery Exemptions.

A new ICCT analysis finds that California’s updated Low Carbon Fuel Standard could generate billions of dollars for medium- and heavy-duty truck electrification by 2035.

Argonne National Laboratory has released GREET 2025, the latest version of its lifecycle analysis tool.

Hydrogen and Sustainable Fuels

Hyundai Motor Group has announced a major green hydrogen push, including a 1 GW production project in South Korea and plans to mass-produce PEM electrolyzers for domestic and global markets.

ExxonMobil is advancing low-emission hydrogen production through methane pyrolysis in partnership with BASF. A new Baytown, Texas demonstration plant is expected to produce 2,000 tons of hydrogen annually.

Hydrogen industry leaders are calling for stronger policy support, practical regulations, infrastructure development, global standards, and public-private partnerships to accelerate hydrogen adoption.

Brazil has announced the Belem 4x Pledge, a commitment to quadruple global production and use of sustainable fuels by 2035. The newsletter also notes that Brazil’s demand for ethanol and renewable natural gas could more than double by 2040.

Smart Mobility

Pirelli’s Cyber Tire is expanding from high-end supercars into broader smart mobility applications. The smart tire can send real-time data on pressure, temperature, and tire type, helping automakers improve braking, traction, and stability control.

Beyond vehicles, Cyber Tires are being used in Italy to map road damage by combining tire sensor data with camera inputs. This could support smart roads, dynamic speed limits, and real-time safety warnings.

Upcoming Events

The January newsletter lists key industry events including the Clean Fuels Conference in Orlando, SAE Government/Industry Meeting in Washington DC, SIAT in Pune, the Zero-Emission Heavy-Duty Powertrain China Summit in Shanghai, and the International Engine Congress in Baden-Baden.