WASHINGTON, Dec 18 (Reuters) - The U.S. Environmental

Protection Agency said on Wednesday it has approved California's

landmark plan to end the sale of gasoline-only vehicles by 2035.

The decision in the final weeks of President Joe Biden's

administration sets up a fight over the future of California's

vehicle regulations. President-elect Donald Trump has vowed to

rescind approvals granted by the EPA to California to require

more EVs and tighter vehicle emissions standards.

EPA Administrator Michael Regan granted a waiver under the

Clean Air Act to California to implement its plan to require

that by 2035 at least 80% of new cars sold be electric and up to

20% plug-in hybrid models. California's rules have been adopted

by 11 other states, including New York, Massachusetts and

Oregon.

The EPA also granted another waiver for California's

"Omnibus" low-NOx, or low-nitrogen oxide, regulation for

heavy-duty highway and off-road vehicles and engines, while six

others are pending.

The Alliance for Automotive Innovation, a trade group

representing General Motors ( GM ), Volkswagen,

Toyota Motor ( TM ) and other automakers, said California's

vehicle rules "will depress economic activity, increase costs

and limit vehicle choice" and will require automakers to sell

fewer vehicles in the 12 states to comply.

"Achieving the mandates will take a miracle. There needs to

be balance and some states should exit the program," the group

said this month.

California's rules require 35% of vehicles in the 2026 model

year to be a zero-emission model, rising to 68% by 2030. The

state says the rule is crucial to meeting greenhouse gas

emission reduction targets and cutting smog-forming pollutants.

On Friday, the Supreme Court agreed to hear a bid by fuel

producers to challenge the waiver California received in 2022

for vehicle emissions rules.

The EPA in March 2022 reinstated a waiver for California to

set its own tailpipe emissions limits and zero-emission vehicle

rules through 2025, reversing a 2019 decision under Trump's

first administration.