My understanding is that the EU is pushing back the phase-out date until 2040.
The European manufacturers have fallen behind the Chinese in EV development and production and are in danger of being overwhelmed. I would imagine this is a factor in the decision.
The EU have shifted from 100% electrification of cars to 90% , probably so that the premium brand manufacturers who pay for the political parties within the EU can have a little more breathing room to sell more premium none EV's.
The devil is in the detail