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Mint
3 days ago
- Automotive
- Mint
CAFE puzzle: Tailpipes must not get to wag India's car market
A controversy is raging in the Indian automobile industry over what India's new norms for Corporate Average Fuel Efficiency (CAFE) should be. Maruti Suzuki has said the current proposals are unfair to makers of small cars, while the rest of the industry—makers of bigger cars, mostly, including EVs—seems to support the CAFE-2 norms proposed for 2027-28 onwards and CAFE-3 five years later. Whether India's largest carmaker expects special treatment for small cars (as with GST) or a correction of this policy designed to reduce carbon exhaust depends on what's at stake here. Since this is about a road traffic clean-up, it is hard to ignore a basic flaw in our CAFE norms: they do not take into account the number of people moved. Also Read: CAFE comfort: New fuel efficiency norms can speed up clean mobility in India Instead of splitting hairs over whether tailpipe exhaust targets should be adjusted, the government should create a new formula to replace what we have. As of now, the formula uses the average kerb weight of an automaker's vehicles for a per-kilometre emission goal to be achieved, but it should be replaced with the average number of passengers per kilogram of kerb weight for that company. CAFE norms were invented in the West after the 1970s' oil shocks to restrain fuel use. Instead of specifying a fuel efficiency target for each car model, it set an average for all cars made by each maker—the 'Corporate Average' bit. Over time, they evolved to cover emissions and various countries adopted them, including India. An automaker's CAFE goal is set as follows: the industry-wide target multiplied by the average kerb weight of all types of vehicles rolled out, divided by the industry's average kerb weight. The ratio of a company's average kerb weight to the industry's is the key variable here. Also Read: Cutting taxes on small cars is a quick fix that ignores the elephant in the room Maruti makes cars that are lighter on average than what others make. Since its ratio is less than one, the current formula gives it a steeper target. News reports suggest a proposal is being considered to let Maruti go by a normatively higher average kerb weight than its actual figure. This is not right. To set the policy straight, we must go back to the whiteboard and take into account the overarching fact that the purpose of cars is to transport people. What matters thus is the emissions per person moved. For the total tonnage of its fleet, an automaker that rolls out a large proportion of small cars would move more people per kilogram of average curb weight, assuming a common occupancy rate per vehicle for the industry. It may even turn out that small cars carry more people per car, given that those who buy larger cars tend to be relatively well-off and belong to households with multiple vehicles. But going by common occupancy is enough to serve the purpose. Also Read: Siam scrambles as CAFE-3 consensus crumbles Yet, taking passengers into the calculus is not enough to account for the entire carbon footprint of vehicles—reducing which is also important. While there are other issues that must be tackled to strengthen climate action, such as EVs using electricity that's likely to be spewing carbon at the generation end behind the power grid, not to mention the pollution of battery production, that point is crucial because big cars have a larger footprint. Any CAFE norms tilted against a maker of small cars would incentivize climate-unfriendly size enlargement across a fleet. While it is true that the Indian market has been shifting towards larger cars anyway, we shouldn't let policy distort it further in that direction.
Economic Times
09-07-2025
- Automotive
- Economic Times
Don't run small cars off the road: Why India's emission rules hurt the cars we actually need
Agencies Corporate Average Fuel Efficiency (CAFE) norms are back in focus - this time for what they leave out. The proposed CAFE 3, set for 2027-28, aims to cut passenger vehicle CO₂ emissions to 91-95 g/km from around 113 g/km under CAFE 2. But concerns are rising that stricter fleet averages could hurt small, fuel-efficient cars while favouring pricier models with electrified variants, undermining affordability and mass CAFE framework is based on older European models, which tightens CO₂ emission targets as the weight of the car decreases. This means larger, heavier vehicles - despite consuming more fuel and emitting more CO₂ - are given relaxed targets, while smaller and more fuel-efficient cars are saddled with disproportionately tighter targets. This is in sharp contrast to how the rest of the world operates: US, China and South Korea follow a piecewise linear model, in which the line becomes horizontal for smaller, lightweight cars. Japan adopts a quadratic curve, which softens at the lower-weight range. Europe has corrected its mistake and now has a negative slope for the CAFE line, which means CO₂ targets for heavier, bigger cars are tighter than those for lighter, smaller ones. These regulatory structures are rooted in practicality, equity and environmental contrary CAFE model can have serious on-ground implications. For many Indian households, a small car is not a luxury - it's a move toward dignity, convenience and road safety. A family using a two-wheeler bears the vagaries of weather. What they need is a four-wheeled solution that is covered, safe, reliable and affordable. With over 25 cr two-wheelers on our roads today, ensuring this shift is a national imperative. Two-wheeler riders account for 45% of road fatalities in India. A safe, affordable car could be life-changing for them - but is increasingly out of financial reach, with even the entry-level car price rising from about ₹2.5 lakh till about six years ago to about ₹5 lakh today. It is not just about regulations but also about recognising the role small cars play in national development. Historically, in the journey of most nations transforming from developing to developed status, small cars have driven mass motorisation, expanded access to jobs and catalysed industrial growth. They offer a cleaner, safer and more inclusive form of mobility. Lightweight, fuel-efficient and less taxing on urban infrastructure, small cars have served not just individuals but the economy. Unfortunately, India appears to be abandoning this path. Entry-level car sales have declined by 77% in the past eight years due to a combination of high taxation, rising insurance and compliance costs, and increasingly stringent regulations. With the proposed CAFE norms applying harsher targets to small cars, this segment risks further erosion. This is a systemic failure to safeguard equitable access to safe personal transport. We can think of modernising small cars, but we should never kill them. There's also an environmental contradiction at play. GoI's Mission LiFE initiative rightly emphasises mindful consumption, efficient use of resources and sustainable living. Small cars use fewer raw materials, consume less fuel, emit lower CO₂ and cause less wear on must adopt a regulatory and fiscal approach that recognises small cars as a distinct category - with lower taxation and easier compliance norms. If the regulatory burden continues to rise, we risk shutting out the majority of Indians from the mobility objective of CAFE is to reduce fuel consumption and CO₂ emissions. But failing to protect vehicles that do both is not just ironic - it is environmentally and scientifically OEMs must rise above individual commercial interests and support a regulatory course correction that serves the national interest. An insensitive approach to the mass segment cannot steer the future of India's mobility. It demands unified resolve, long-term thinking and policy alignment with the needs of our people. The writer is former president, Society of Indian Automobile Manufacturers (Siam) (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Newton vs. industry: Inside new norms that want your car to be more fuel-efficient India's gas dream runs on old pipes. Can a European fix unclog the future? Engine fuel switches or something else? 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