India’s CAFE-3 vehicle rules draw criticism over limited EV push
India’s new Corporate Average Fuel Economy rules will tighten passenger-vehicle efficiency standards from April 2027, while offering manufacturers several compliance routes and credits for cleaner technologies. Former NITI Aayog chief Amitabh Kant and an industry analyst said the framework could allow companies to meet targets without accelerating electric-vehicle adoption sufficiently.
India’s third phase of Corporate Average Fuel Economy norms will take effect on April 1, 2027, but critics say the framework may not push manufacturers towards electric vehicles quickly enough. The rules, notified by the Centre on September 30, will apply to new passenger vehicles made or imported for sale in India and remain in force until March 31, 2032. The fleet fuel-consumption benchmark will tighten from 3.996 litres per 100 km in 2027-28 to 3.3273 litres in 2031-32, an improvement of about 16.7%.
The framework gives additional weight to several cleaner technologies. Each battery electric vehicle and range-extended electric vehicle will count as three vehicles in a manufacturer’s fleet calculation. Plug-in hybrids and flex-fuel strong hybrids will count as 2.5 vehicles, while strong hybrids will count as 1.6.
Manufacturers can earn, carry forward and trade credits during a compliance period. They may also offset deficits by purchasing credits from the Bureau of Energy Efficiency, subject to prescribed rules. The regulations provide further benefits for ethanol, biofuel and CNG use, as well as for technologies such as start-stop systems, regenerative braking and tyre-pressure monitoring.
Former NITI Aayog chief Amitabh Kant criticised the approach, saying the rules represented a missed opportunity to use fuel-efficiency regulation to accelerate electric mobility. He argued that electric vehicles had become one option among several when they should be the intended destination. Amit Bhatt, India managing director of the International Council on Clean Transportation, said the norms could be a powerful tool but warned that the multiple compliance routes might allow manufacturers to rely largely on existing technologies.
Mr. Bhatt said industry commitments indicated around 20% electric-vehicle sales by 2030, while the final framework could reportedly be met with roughly 12% electric-vehicle uptake by 2032. He said the concessions could dilute the purpose of credits intended to help emerging technologies scale.
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