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Tata Motors, Hyundai, Mahindra and MG believe the CAFE 3 norms’ weight-based emission concession will give undue advantage to Maruti Suzuki.
Tata Motors, Hyundai, Mahindra and MG believe the CAFE 3 norms’ weight-based emission concession will give undue advantage to Maruti Suzuki.
The aforementioned auto OEMs believe tat this norm will disproportionately burden manufacturers of budget cars, with increased costs for technologies like hybrid systems making their vehicles unaffordable for many consumers. The auto manufacturers focused on larger vehicles, however, are better positioned to meet the less stringent targets and some oppose special relaxations for small cars.
| Key features of CAFE 3 norms | Stringent fuel economy targets, weight-based formula, relief for small petrol cars, incentives for cleaner vehicles, shift to WLTP |
| Weight-based formula | The proposed CAFE 3 norms use a formula where smaller, lighter vehicles face the most significant improvements needed for their fleet’s average carbon dioxide emissions |
| Impact on small car manufacturers | Increased cost, affordability concerns |
| Impact on large car manufacturers | Less stringent targets, opposition to relaxations |
What’s CAFE 3 norms?
CAFE 3 norms are a draft of India’s next phase of Corporate Average Fuel Efficiency standards for the passenger vehicles. This is expected to be effective from 2027 to 2032. These norms require automakers to reduce the average fuel consumption and carbon emissions of their fleet over this period, with targets progressively tightening every year. The CAFE 3 norms draft also includes relief for smaller petrol cars and incentives for electric and hybrid vehicles, and shifts the testing standard to the more realistic WLTP.
CAFE 3: What’s the debate?
Two major players in the Indian passenger vehicle market, Tata Motors and Hyundai want the government to scrap the weight-based emission concession for small cars under the planned new efficiency rules. These auto OEMs have wrote individual letters to the government stating that this norm would benefit just one company. Despite no mention of the company, the hint is clearly indicating at Maruti Suzuki, known for manufacturing ultra-light small cars and offering high fuel efficiency.
On the other hand, Maruti Suzuki, the biggest carmaker in India, in terms of production and sales volume, has been arguing that global car markets like Europe, US, China, South Korea and Japan – all had some provisions in their emission regulations to protect the very small cars.
CAFE 3: The core of disagreement
Limited potential for fuel efficiency improvements is the key reason behind the disagreement. Under India’s current CAFE norms, the quantity of permissible CO2 emissions applies to all passenger cars weighing less than 3,500 kg. The new proposed rule aims to tighten average CO2 emissions to 91.7 grams/km from a previous target of 113 grams/km. The proposed rule claims to make it tougher for small cars to meet the target compared with large SUVs, pushing companies to sell more EVs.
In its latest draft for the proposed CAFE 3 norms, Indian government has proposed leniency for petrol cars weighing 909 kg or less, measuring under 4,000 mm in length and with engine capacity of 1,200 cc or below as they offer limited potential for efficiency improvements, which has created a sharp split between the leading carmakers focused on making EVs and Maruti Suzuki, for which 16% of total sales come from cars weighing less than 909 kg.
Reuters has cited three automakers’ executives saying that the 909 kg threshold is arbitrary and do not align with any global standards, alleging that this move would only benefit Maruti Suzuki.
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