New CAFE 3 Proposal Could Bring Relief For Small Cars, Big Push For Hybrids And EVs

After GST 2.0, the Indian government is working on new rules to make cars cleaner and more fuel-efficient, and a fresh draft of the Corporate Average Fuel Economy norms, commonly known as CAFE 3 norms, has just been released. These CAFE 3 rules decide how much carbon dioxide (CO₂) carmaker’s entire range of vehicles can emit on average, compelling them to build greener and more efficient cars.

The new proposal will take effect from April 2027 and makes the rules stricter every year. For example, the average carbon dioxide emission target will start at 88.4 g/km in 2027 and then gradually drop to 71.5 g/km in the following years,which means manufacturers will need to sell more fuel-efficient, hybrid, or electric cars to balance out their bigger,

or less efficient models.

Relief for Small Petrol Cars

The draft gives a little relaxation to small petrol cars, specifically those under 4 metres long, weighing less than 909 kg and with engines up to 1200cc. These models can claim a 3 g/km CO2 reduction in their declared emissions, which makes it a bit easier for carmakers to keep them in the lineup.

Also read: Honda BigWing Motorcycles Get Pricier By Up To Rs 2.92 Lakh After GST Hike

Hybrids and EVs Get Extra Credit

To push cleaner technology, the draft introduces a credit multiplier system, which means one electric car or a range extender hybrid means- a car that runs mainly on battery but has a small petrol engine to recharge it, will be counted as three cars in emission calculations. Plug-in hybrids and strong hybrids will count as 2.5 cars, while flex-fuel ethanol models get 1.5 times more credit. This norm makes it easier for companies investing in green tech to meet their fleet-wide targets.

Carmakers Can Team Up

Another interesting rule of CAFE 3 allows up to three companies to establish a collective pool. They will be treated as one entity for emission targets, helping smaller manufacturers partner with bigger ones to avoid penalties. In simple words, CAFE norms are like a report card for carmakers, so, if they sell too many gas guzzlers, they will need to balance it with more efficient cars like EVs, hybrids, or small petrol cars. With CAFE 3 norm India is getting more serious about the CO2 emissions, but also giving some relief to budget-friendly small cars and encouraging futuristic technologies like hybrids and EVs.

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