A sharp division has emerged among India’s biggest carmakers over proposed changes to the country’s Corporate Average Fuel Efficiency (CAFE) norms, with major manufacturers including Tata Motors, Mahindra & Mahindra, JSW MG Motor, and Hyundai urging the government to scrap a weight-based emission concession for small cars.
These companies argue in letters seen by Reuters that this specific provision would unfairly benefit a single competitor—identified by industry data and three auto executives as Maruti Suzuki—and could ultimately hinder India’s progress toward its Electric Vehicle (EV) goals.
The Proposed Leniency and Industry Rift
India’s current CAFE norms apply to all passenger cars under 3,500 kg (7,716 lb). The proposed new rules aim to significantly tighten the permissible average fleet CO2 emissions to 91.7 grams/km, a substantial reduction from the earlier target of 113 grams/km. This tightening makes it more challenging for all manufacturers, especially those relying on Internal Combustion Engine (ICE) vehicles, and is designed to push companies to accelerate sales of cleaner technologies, particularly EVs, to meet the fleet-average target.
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The proposed leniency that sparked the current conflict is contained in the latest draft, which suggests an exemption for petrol cars weighing 909 kg or less, measuring under four meters in length, and with an engine capacity of 1200 cc or below. The government justified this specific concession by claiming these vehicles offer “limited potential for efficiency improvements.”
This arbitrary 909 kg threshold has created a sharp split, as the opposing automakers, many of whom are leading the nation’s EV transition, contend that it is not aligned with any global standards and is designed to disproportionately aid Maruti Suzuki. Industry data indicates that over 95% of cars under 909 kg sold in India come from a single carmaker, which is Maruti Suzuki—for whom about 16% of sales still come from cars in this category, despite a general market shift toward larger SUVs.
Opposition Argues EV Goals and Safety
The opposing carmakers have articulated several concerns across their respective letters to the ministries of power, transport, and industries.
Tata Motors, Mahindra, and JSW MG Motor are concerned that the concession provides an easy path for one manufacturer to meet the stricter CAFE norms without significant investment in electrification or advanced powertrain technologies, thereby slowing the overall national transition to cleaner vehicles. Mahindra requested the omission of any “special category” or definitions based on size or weight, warning of “adverse effects in terms of the nation’s progress towards safer, cleaner cars.”
Three company executives stated the 909 kg threshold was arbitrary. Hyundai argued that the exemption may be viewed internationally as a step backward at a time when global markets are moving toward stricter, zero-emission standards. Hyundai also warned that “abrupt policy changes favoring a specific segment risk undermining industry stability” since future investments are planned based on established norms.
While not explicitly mentioned in the primary report, other public comments by opponents (such as Tata Motors Passenger Vehicles MD) have highlighted that lighter vehicles, particularly those around the 909 kg mark, may have lower safety ratings, and the exemption risks jeopardizing the significant safety advancements made by the industry.
Maruti Suzuki’s Defense
Maruti Suzuki, the main beneficiary of the proposal, defended the measure by stating that global car markets, including Europe, the U.S., China, Korea, and Japan, all have some provisions in their emission regulations to protect “very small cars.” The company argued that small cars inherently consume much less fuel and emit less carbon dioxide than bigger cars, and having this “safeguard” would actually help both CO2 reduction and fuel saving overall.
This impasse has led to delays in finalizing the regulation, which is vital for all automakers as they plan future product portfolios and make necessary investments in powertrain technology.