The popularity of SUVs in Europe is challenging automakers to improve fuel efficiency to meet emissions regulations. SUVs now make up over a quarter of new vehicle registrations in Europe, with demand expected to continue growing. However, SUVs tend to be less fuel efficient than smaller cars. Automakers are developing more hybrid and electric SUVs, smaller and lighter SUVs, and improved gasoline engines to satisfy demand while still complying with tougher emissions rules. Meeting the new regulations after 2021 will require significant innovation from automakers across new technologies.