30 September,2026 12:39 PM IST | New Delhi | mid-day online correspondent
Representational Image. File pic.
The government on Wednesday notified new corporate average fuel economy (CAFE-3) norms for passenger vehicles for the five years beginning April 1, 2027, while removing the concession proposed for small petrol cars, reported news agency PTI.
The new norms will apply to new passenger vehicles manufactured or imported for sale in India, the Ministry of Power said in a statement.
Passenger cars, including hatchbacks, sedans, special utility vehicles, and MPVs, with a seating capacity of eight passengers other than the driver, will be covered under the new regulation.
The draft CAFE-3 regulations had initially proposed a concession of 3 grams per km for lightweight petrol cars (under 909 kg) to keep them affordable, according to IANS. However, this was scrapped in the final norms.
Instead, the government has changed the weight-based formula used to set targets and said, "The revised target line has also been flattened to provide a more balanced, weight-sensitive approach, with relatively softer targets for lighter vehicles and greater fuel-efficiency requirements for heavier vehicles."
The reference weight has been increased from 1,082 kg under existing norms to 1,229 kg under new CAFE norms, an increase of around 13.6 per cent, reflecting the evolving characteristics of the passenger vehicle fleet.
Manufacturers with annual sales of below 1,000 units will remain exempt from fleet-average obligations, thereby avoiding the regulatory burden for low-volume manufacturers, it said.
The new norms provide flexibility to manufacturers to adopt cleaner technologies, alternative fuels and other innovative solutions, and is incentivising the adoption of electric vehicles.
"Battery Electric Vehicles (BEVs), Range-Extended Electric Vehicles (REEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Strong Hybrid Electric Vehicles(SHEV) and Flex-Fuel Vehicles will receive volume derogation factors, also known as 'super credits', in fleet-average calculations. This provides an additional incentive for manufacturers to accelerate the deployment and market penetration of cleaner and advanced vehicle technologies," it said.
One battery electric vehicle will be counted as three vehicles for calculating a manufacturer's fleet performance, while the same 3x factor applies to range-extended electric vehicles, according to news agency IANS.
Plug-in hybrids and strong hybrids running on flex-fuel will get a 2.5x factor, while strong hybrids will get a 1.6x factor. Flex-fuel vehicles will get a 1.1x factor, as per IANS.
Besides, the framework has also introduced a credit-debit system to provide manufacturers flexibility to meet CAFE targets. Companies exceeding their targets earn credits that can be carried forward, while those falling short can make up the deficit using past credits, trading credits with other automakers, or purchasing them through a Bureau of Energy Efficiency-administered buyout mechanism.
The government has tightened the fuel-consumption benchmark from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32, representing an improvement of around 16.7 per cent over the period.
"The new CAFE framework will drive progressive improvements in fuel economy through year-on-year tightening of targets across all five years," it said.
(With inputs from IANS and PTI)
