Auto companies push for easing of fuel efficiency norms
Automakers are urging the government to relax new CAFE III fuel efficiency norms, set to begin in April 2027, due to the low penetration of electric vehicles. They argue current standards are too stringent without significant EV adoption and seek calculations based on the MIDC cycle.
The new norms are slated to come into effect on April 1, 2027.
In the latest round of consultative meeting held earlier this month between the auto industry and government, representatives from automakers cited the current low penetration of electric vehicles (EVs)-critical for curbing overall vehicular emissions-in the Indian market for easing the norms.
CAFE norms are levied on a carmaker's entire fleet, and not individual models.
They are based on time limits set on a carmaker's total carbon dioxide emissions and are aimed at pushing companies to make more fuel-efficient cars by using clean technologies.
The amount of CO2 a car emits is directly proportional to the amount of fuel it consumes.
ET Bureau Live Events The Bureau of Energy Efficiency has given automakers an emission target of 91.7g/km under the more stringent WLTP cycle (Worldwide Harmonised Light Vehicles Test Procedure). However, automakers have proposed emission of 92.9 g/km under the India-specific, MIDC (Moderated Indian Driving Cycle). These standards are mandated for testing vehicle emission and fuel efficiency.
The current fuel emission standards under CAFE II norms, which will run through March 2027, allow automakers to emit 113.1 grams per km. "This is too steep a cut. This can only be achieved with large penetration of EVs which doesn't seem plausible under the current scenario," said one of the executives aware of the meeting's agenda.
"Also, they want the emissions to be calculated as per WLTP, but we are asking for MIDC.
The discussions are on. They have asked industry for the data and the rationale behind the request.
" EV penetration in India 's nascent electric car market rose to 2.4% in 2024, from 2.1% in 2023, according to Federation of Automobile Manufacturers Associations.
A raft of new model launches by the top six carmakers is likely to more than double EV penetration in 2025.
However, it will far lag the government's vision of 30% EV penetration by 2030.
Even in the best-case scenario, it is unlikely to exceed 10-12%, as per estimates.
A second auto industry executive said, "The CAFE III standards shouldn't be so strict.
The WLTP is 15% more stringent than MIDC and the switchover cost is going to be very high.
Even those who have higher EV penetration will struggle.
" During talks with a representative from the power ministry-which is now actively involved in stakeholder consultations-and BEE-tasked with setting the standards-members of the Society of Indian Automobile Manufacturers (Siam) bolstered their argument on relaxing the norms by citing an instance of the failure of European automakers to meet carbon reduction target due to stringent standards.
Earlier this month, the European Commission allowed European automakers three years, rather than only one, to meet new CO2 emission targets, Reuters reported on March 3. "The EU is a classic example of what happens when targets are unrealistic.
We are all in favour of an ambitious one, but it has to be realistic as well," said a third executive at an auto company.
Meanwhile, companies are also asking the government to have a "technology agnostic" approach when calculating the CAFE score.
"They should give weightage to all clean technologies-hybrid, flex fuel, CNG, biogas," said a fourth executive at an automaker.
