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The standards on residential water heater efficiency, which are required by Congress, have not been updated in 13 years. Water heating is responsible for roughly 13% of both annual residential energy use and consumer utility costs, the DOE said.
Heat pump water heaters already exist, but I think they’re pretty expensive compared to gas/resistive heat.
I wouldn’t be surprised if electric tankless water heaters are indeed infeasible under this mandate. Heat pumps generally aren’t powerful, and tankless heaters require enormous amounts of power while in use.
Heat pump water heaters are pretty standard in large parts of the world. They are a bit expensive to install, but with today’s electric prices, they pay off quite fast.
It may exist but to require it is a whole different ball game.