This violates free market principles. If they are worried about consumer privacy they should pass a robust automotive consumer privacy law (the American car companies spy even worse because they sell the data with impunity)
Also it will just mean that US car companies don’t have to address their shortcomings and will lose the world while keeping the us market.
Fast forward this decision and I can envisage a land of automotive strangeness much like the “other worldly” sense you get when landing in Cuba and seeing the preponderance of strange (to modern eyes) old cars.