While passenger vehicle manufacturers continue to be divided over relaxed emission norms proposed for small cars with Maruti in favour of the relief and Tata Motors, Mahindra, and others opposed to it, they are unitedly seeking higher super credits for electric vehicles than flex-fuel and hybrid models. The new emission norms — Corporate Average Fuel Efficiency (CAFE) III — would come into effect from 2027 and be valid till 2032.
The Society of Indian Automobile Manufacturers, Executive Director, Prashant K Banerjee, in a recent letter to Power Secretary, Pankaj Agarwal, has said that the Bureau of Energy Efficiency’s decision to award nearly similar super credits to battery electric vehicles, flex-fuel models and hybrids dilutes the country’s core objective of accelerating the transition to fully electric mobility.
The industry’s concern is that by giving transitional technologies like hybrids and flex-fuels, super credits which is too close to that of electric vehicles, the BEE risks slowing down the shift to zero-emission transport.
Under the latest draft floated by BEE, flex-fuel ethanol vehicles and plug-in hybrids would receive a super credit of 2.5, while battery electric vehicles would receive a bonus credit of 3. This multiplier determines how much each low-emission vehicle counts when calculating a company’s fleet-average carbon output. A higher multiplier eases compliance with tightening CO₂ norms by letting cleaner vehicles offset heavier-emitting ones. SIAM has said that the super credit for EVs should be higher at 4 as the difference of just half a point between hybrids and EVs is too narrow to reflect the real environmental gap between the two technologies.
According to industry executives, hybrids and flex-fuel vehicles remain interim solutions that still rely on fossil fuels, while EVs eliminate tailpipe emissions altogether. According to them, BEE’s draft’s current structure blurs this distinction and makes it commercially less attractive for companies to prioritise investment in fully electric platforms. According to a senior official at a leading passenger vehicle manufacturer, EVs deserve a clear advantage because they deliver the biggest emissions reduction, both on paper and on the road. Accordingly, a super credit of at least 4 for EVs, which is similar to what the BEE originally proposed in June 2024, would create a stronger business case for manufacturers already investing heavily in EV capacity.
Most companies, including Tata Motors, Mahindra, Hyundai and soon Maruti Suzuki, are either expanding their EV portfolios or preparing to launch their first models ahead of CAFE III. With EV pipelines strengthening, the industry sees little merit in a policy that places electric vehicles only marginally above hybrids and flex-fuel options.
For both small-car and SUV manufacturers, higher EV super credits would provide critical relief. The BEE calculates EV emissions at roughly one-third of the fleet average of 91.7 g/km, meaning that counting them four times instead of three would materially lower a manufacturer’s overall score and help them avoid penalties. Companies say this becomes especially important as even the proposed small-car exemption requires petrol models to operate under strict base limits, while SUV makers face even steeper compliance pressure due to their inherently higher emissions.