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Leading passenger vehicle manufacturers in India have welcomed the government's new Corporate Average Fuel Economy (CAFE) III norms. Leading passenger vehicle manufacturers in the country, including Maruti Suzuki, Tata Motors, Hyundai, and Toyota, have welcomed the new norms.
The auto OEMs said that the new framework comes with technology flexibility, which will help the industry in its transition towards cleaner vehicles. The automakers also believe that the framework will give the industry greater clarity to plan their investments while allowing multiple technologies to meet tighter fuel-efficiency targets.
The CAFE-III norms will be in force from April 1, 2027 to March 31, 2032. It targets a 16.7% improvement in passenger vehicle fuel efficiency over the aforementioned five years. The automakers in the country have to prepare their product strategies for the norm. The CAFE-III is expected to influence how automakers balance investments across electric vehicles, hybrids, alternative fuels and more fuel-efficient conventional vehicles powered by internal combustion engines, as fleet-level fuel consumption targets have become progressively stricter than before.
Under the CAFE-III norms, the fuel-consumption benchmark will tighten from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km by 2031-32. This framework also provides incentives for battery electric vehicles, plug-in hybrids, strong hybrids, range-extended electric vehicles and flex-fuel vehicles in fleet-average calculations.
Auto manufacturers exceeding their targets will be able to carry forward credits, while those facing a shortfall can use or trade eligible credits, giving companies greater flexibility in meeting the new efficiency requirements.
Responding to the CAFE-III norms, Maruti Suzuki said the regulation recognises the role of different powertrain technologies and fuels, allowing manufacturers to pursue multiple routes towards lower emissions. “The regulation recognises the contribution of multiple powertrain technologies and fuels, encouraging multi-faceted R&D and innovation," said Rahul Bharti, Senior Executive Officer, Corporate Affairs, Maruti Suzuki. He added that the credit and debit mechanism under CAFE-III was an improvement over the previous CAFE-II framework.
Tata Motors Passenger Vehicles said the continued recognition of zero-emission technologies reinforces the role of electrification in India’s cleaner mobility transition. “The clarity and predictability provided by the framework will enable the industry to plan investments, accelerate innovation and offer customers an increasingly compelling range of cleaner mobility solutions," said Shailesh Chandra, MD and CEO, Tata Motors Passenger Vehicles Ltd.
Another major player in the Indian passenger vehicle market, Hyundai Motor India, also highlighted the regulatory certainty provided by the new framework. “The norms provide a clear and predictable regulatory roadmap through a 3 2 year compliance block structure, enabling manufacturers to undertake long-term product and technology planning with greater certainty," said Tarun Garg, MD and CEO, Hyundai Motor India Limited. He further said the framework’s technology-neutral approach recognises multiple pathways, including electrification, alternative fuels and advanced fuel-saving technologies.
Welcoming the move, Toyota Kirloskar Motor has said that the CAFE-III regulation takes due cognisance of the importance of various clean technologies, using an objective and science-based assessment methodology to arrive at a regulation that is best suited for our national interests. “Aligning to multi pathway approach, battery electric vehicles (BEVs), Range Extenders (REEV), Plug-in Hybrid Vehicles (PHEVs), Strong Hybrid Electric Vehicles (SHEVs) and Flex Fuel Vehicles (FFVs), including Flex Fuel Strong Hybrid Vehicles (FFV-SHEV) have all been fairly recognised. This will enable the country to rapidly reduce its dependence on imported fossil fuels by leveraging the benefits of high levels of energy efficiency provided by Hybrid vehicles and substituting fossil fuels with electricity using BEVs/PHEVs/REEVs," said Vikram Gulati, Country Head and Executive VP, Toyota Kirloskar Motor.
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