The need to control global warming by regulating automotive emission levels has led to a lot of changes in the policies of different countries globally, specifically the United States (US) and the European Union (EU). More recently, the governments have been strongly pushing the integration of Electric Vehicles (EVs) in the market to replace the conventional Internal Combustion Engine (ICE) vehicles for CO₂ emissions reduction, with the enforcement of 50% EV sales by 2030 in the US and complete 100% by 2035 in the EU for passenger cars. However, these policies are misleading by considering EVs as zero emission vehicles, as there is no such technology yet available that has zero emissions during its lifecycle. During the manufacturing phase, any vehicle produced gives out emissions, with EVs emitting even higher than the conventional ICE vehicles with their battery manufacturing. Further, during the use phase, there might be no Tank-to-Wheel emissions from the EVs due to zero tailpipe emissions, but they do have very high Well-to-Tank emissions from the electricity generation needed to recharge the batteries. On the other hand, hybridization is also a promising way for CO₂ emissions reduction. Using synthetic e-fuels, hybrids can have emission reductions much higher than using conventional fuels or even when compared to EVs on life cycle basis. Hence, in this study, we have evaluated the life cycle CO₂ emissions reduction potential with electric and e-fueled ICE vehicle as two different cases, varying their sales from 0 to 100%, according to the set EU and US targets, for the total car fleet of both the countries. The evaluation is done with 0D numerical simulations performed on GT suite, for 30 different drive cycles consisting of 10 urban, 10 sub-urban and 10 highway cases with GPS based vehicle speed information, for US as well as EU separately. Results shows that e-fueled ICE and e-fueled hybrid vehicles have greater CO₂ emissions reduction potential than EVs.