Amid lobbying, govt may defer fuel efficiency norms for car companies

The proposed CAFE 3.0 framework removes concessions for small cars and introduces incentives for cleaner technologie.

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Amid lobbying by car companies, govt may end up deferring the implementation of Corporate Average Fuel Efficiency norms (CAFE 3.0) beyond April 2027. The PM’s Office has held two meetings during the last three weeks and more deliberations on the issue are planned to work out a formula that is acceptable to industry and helps improve fuel efficiency and emission.At a meeting in PMO on Monday, the power ministry made a detailed presentation on the proposed CAFE 3.0 norms, while highlighting the “urgent” need to notify the norms.For the first time, the ministry presented a detailed assessment of the expected performance of the top five car makers in the country. It said that based on the proposed framework, which will be released for public comment, only Tata Motors will be able to meet the target between 2027-28 and 2031-32, while Maruti Suzuki and Hyundai Motors India may not make the cut.The presentation shows that Toyota-Kirloskar Motors will be able to meet targets in first three years, 2027-28 to 202930, while Mahindra & Mahindra will miss the goals in first three years. “Going by this, the proposed regime will end up in levying high penalty on companies that do not meet the target,” said an official.CAFE 3.0 norms propose to do away with derogation (extra allowance) or relief for small car makers, while seeking to introduce RangeExtended Electric Vehicle (REEV), which would have the same Volume Derogation Factor (VDF) of 3 as for electric cars. VDF is a targeted govt measure to push the sale of less polluting vehicles like EVs, REEVs and hybrids.“Going by current status, it may take at least a couple of months to notify norms. The industry would require at least a year to implement this,” a person aware about the development said.