Auto cos to seek easier emission rules, EV credits

India's auto industry is pushing the government to ease fuel efficiency rules and expand incentives for electric vehicles (EVs), even as it remains divided over concessions for small cars.

- Manas Pimpalkhare

The negotiations could shape the country's vehicle mix, technology investments, and competitiveness for the next decade.

Carmakers are unsettled by the September draft of the third edition of the corporate average fuel efficiency (CAFE) rules, which tighten efficiency targets, introduce annual improvement milestones, and revise incentives across power-trains, including EVs, hybrids, and flex-fuel vehicles.

The Society of Indian Automobile Manufacturers (Siam) is preparing to raise these concerns with the Union heavy industries ministry, which oversees India's EV incentive schemes, according to two people familiar with the discussions.

Stricter fuel-efficiency norms push automakers towards cleaner technologies and help reduce emissions. However, the pace and design of the targets could have implications for vehicle costs, product cycles and the competitiveness of domestic manufacturers during the global transition.

A key industry demand is additional "super-credits" for zero-emission vehicles and a reexamination of annual fuel efficiency targets, which carmakers argue are too steep and operationally unviable, one of the people cited earlier said.

The industry itself is divided over proposed relaxations for small cars weighing under 909 kg and under four metres in length. These concessions disproportionately benefit Maruti Suzuki, India's largest carmaker by sales, whose portfolio is dominated by compact models such as the Alto.