The domestic automotive industry has unanimously welcomed the April 8 draft Corporate Average Fuel Efficiency (CAFE 3) norms. During a meeting with the Ministry of Power on Thursday, industry buddy Society of Indian Automobile Manufacturers (SIAM) said that while the proposed targets are ambitious, the government’s balanced approach—offering technology and volume derogations, along with provisions for pooling and credit purchases—has provided sufficient flexibility to help the industry meet the targets.
Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM), said during the meeting that while the industry does have a wishlist, it remains broadly aligned and on the same page overall. SIAM also urged the government to notify the draft norms soon so that companies have adequate time to make the necessary changes and ensure the April 1 deadline is not missed.
FY32 Roadmap
CAFE norms are regulations that mandate a specific, fleet-wide average limit on fuel consumption or carbon dioxide (CO2) emissions for all passenger vehicles produced and sold by an automaker in a given year. The CAFE CO2 emission targets have progressively tightened, declining from 130 g/km in Phase 1 and 113 g/km in Phase 2, down to a strict terminal target of 78.9 g/km by FY32 proposed under Phase 3.
The meeting was attended by representatives from all major original equipment manufacturers (OEMs), including Maruti Suzuki, Tata Motors, Mahindra, Mercedes-Benz, and JSW MG, along with officials from the Ministry of Power, the Ministry of Road Transport and Highways, Ministry of Heavy Industries, and the Ministry of Petroleum and Natural Gas.
E25 Transition
Among the key demands raised by OEMs during the meeting, Maruti Suzuki sought greater relief for small cars, while EV leaders such as Tata Motors and Mahindra & Mahindra pushed for higher credit allocation for electric vehicles. However, the government rejected both requests.
Small cars have been granted a relaxation of around 13 g COâ‚‚ per kilometre under the April 8 draft, while electric vehicles have been allocated three super credits, which the ministry said are sufficient.
One demand unanimously put forward by the industry was to allow the transfer of credits from the three-year phase from FY28 to FY30, into the subsequent two-year phase from FY31 to FY32, to help meet their targets.
Under the current proposal, OEMs will be allowed to carry forward annual surpluses or deficits within each block, enabling them to smoothen compliance over time. Allowing them to take the credits to the second blocks will further ease the compliance for OEMs.
During the meeting, the Ministry of Power also asked automakers to prepare for the E25 mandate. The ministry said the E25 mandate will come into effect within months and that the industry should be prepared for the transition.
