Carmakers rev up plans to follow fuel efficiency norms

Maruti, Mahindra, Hyundai, Tata Motors are all looking to increase sales of green vehicles

- Ayaan Kartik & Nehal Chaliawala

Maruti Suzuki India Ltd, Mahindra & Mahindra Ltd (M&M) and Hyundai Motor India Ltd will have to ramp up the share of electric, CNG and hybrid vehicles in their sales to comply with stricter fuel efficiency rules to be rolled out from April 2027 in India.

Maruti Suzuki, India's largest carmaker, and Mahindra seek to bump the share of electric vehicles (EVs) to nearly a fifth of their sales in the coming years from below 5% in the year ended March 2025, according to plans disclosed by companies. Tata Motors, with a third of its sales coming from CNG and electric cars last fiscal, is relatively better placed than peers to meet the Corporate Average Fuel Efficiency (CAFE) 3 norms.

The target will be relatively tougher to meet for Mahindra and Hyundai, whose portfolios are dominated by big sport utility vehicles (SUVs), according to a Goldman Sachs report. Tata Motors will be able to meet emission norms cap, it said.

The Bureau of Energy Efficiency's draft CAFE 3 norms, released on 25 September, mandate carmakers to gradually cut the average fuel consumption of the cars they sell from 3.73 litres per 100km in 2027 to 3.01 litres by 2032. Since the rules look at an average of the fuel consumption and tailpipe emissions across vehicles sold, companies benefit from selling more clean-fuel cars like EVs, CNG and hybrids.