The Indian government has notified the third phase of the Corporate Average Fuel Efficiency (CAFE) norms for the passenger vehicles, thereby introducing the stricter targets for the fuel consumption, which will have to be followed by the automobile manufacturers. The new regulations will apply from the April 1, 2027, to the March 31, 2032, with the main aim of improving the fuel efficiency and encouraging the adoption of the cleaner vehicle technologies.
The updated norms are part of the broader efforts being made by India to reduce the fuel consumption and the emissions from the transport sector while encouraging the automobile companies to invest in the more efficient technologies.
Stricter Fuel Consumption Target
Under the new CAFE framework, the fuel-consumption benchmark for the passenger vehicles will become progressively stricter. According to the reported norms, the benchmark will tighten from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km by 2031-32, which represents an improvement of around 16.7% over the five-year period from 2027 to 2032. The norms will cover the new passenger vehicles that are manufactured or imported for selling in India.
The CAFE regulations will work at the fleet level rather than simply judging the individual vehicles. The automobile manufacturers are required to ensure that the average fuel efficiency of their vehicle fleet meets the standards, which will be prescribed by the government.
Electric Vehicles Get Greater Weightage
One of the significant features of the new framework is the treatment of the electric vehicles (EVs). Under the notified norms, each battery electric vehicle will be counted as the three vehicles for the purpose of calculating a fleet-efficiency performance of a manufacturer.
This higher weighting can help the manufacturers meet their overall fleet targets when they introduce more electric vehicles into the market.
The other cleaner technologies will also receive the specified credits, which include the hybrid vehicles, the flex-fuel vehicles, the biofuel-based vehicles and certain fuel-efficiency technologies.
This approach provides the manufacturers with the different technological pathways for improving the overall efficiency of their fleet instead of just relying on a single type of the vehicle technology.
Changes in Vehicle Weight Calculation
The new CAFE framework uses 1,229 kg as the reference vehicle weight, after removing the earlier concession for the small cars weighing up to 909 kg.
The vehicle weight is an important component of the CAFE calculations because he heavier vehicles generally require more energy for their movement. By changing the reference framework, the government is trying to make the efficiency assessment more closely aligned with the characteristics of the passenger-vehicle fleet.
The norms broadly cover the passenger cars, including the hatchbacks, the sedans and the sport utility vehicles (SUVs).
How Fuel Efficiency Will Be Measured
The average fuel consumption of the fleet will be calculated using the Modified Indian Driving Cycle (MIDC) and the results of it are expressed in petrol-equivalent litres per 100 km.
For the individual models, the fuel consumption will be calculated using their notified tailpipe carbon dioxide emissions.
The different fuel and the powertrain technologies will be converted into the petrol-equivalent figures using the specified conversion factors. For the electric vehicles, the energy consumption will be measured in the kilowatt-hours per 100 km.
This allows the vehicles using different technologies and the fuels to be assessed within a common regulatory framework.
Why the New CAFE Norms Matter
The passenger vehicles are an important source of the petroleum demand and the transport-related emissions. Improving the average efficiency of the new vehicles can therefore reduce the amount of fuel required to travel the same distance.
The stricter CAFE norms could also influence the product strategies of the automobile manufacturers. The companies may have the greater incentives to introduce the electric vehicles, the hybrids, the flex-fuel models and the other fuel-efficient technologies to improve their performance at the fleet level.
For the consumers, the long-term impact could include the greater availability of the vehicles using the alternative powertrains and the improved fuel efficiency in the newly introduced models. However, the actual effect on the vehicle prices, the technology choices and the consumer costs will depend on how will the manufacturers be responding to the new requirements.
A Shift Towards Cleaner Mobility
The latest CAFE framework of India represents another step towards improving the efficiency of the passenger-vehicle fleet of the country. Rather than focusing only on the emissions from the individual models, the regulations will use the fleet-level targets to encourage the manufacturers to improve the overall efficiency of their product portfolios.
With the new standards scheduled to operate from 2027 to 2032, the automobile companies will have to increasingly incorporate the fuel-efficient and the lower-emission technologies into their future vehicle strategies. The framework therefore links the fuel conservation, the vehicle efficiency and the gradual transition towards a cleaner mobility in the Indian automobile sector.