I like the idea in principle, but hasn't the market already said that it cannot produce more efficient ICE vehicles? We can legislate better cars, but can we actually build such cars and sell these? This sounds off (hybrids exist), but bear with me and let me explain.
As another commentator wrote, it's much more cost effective to simply sell larger cars to go around the rules. Why is it better to sell much larger, much more expensive cars? Maybe it's because there is not a good, cost effective solution in this problem space. Many consumers don't want to buy electric cars due to lack of infrastructure, and it's a complete non-starter if you can't charge at home such as if living in an apartment. Right now, the EV market is seeing trouble moving inventory. Automakers prefer not to produce or sell smaller cars because it doesn't make sense for some reason, and part of that reason could be an impracticality of a small, low cost, mass market, yet efficient car that people will actually buy. Maybe a small hybrid that meets this goal is still too expensive for enough of the consumers who want to buy a compact car. The trend to larger cars might be telling us something.
Overall, I think I favor the legislation, but I'm concerned that we're not thinking this through enough. We can legislate the requirement. Are we also taking steps to expand charging access and have a plan to make such cars with consumer appeal outside of the premium segment?