New CAFE-3 framework provides technology flexibility, say automobile manufacturers

The newly notified CAFE-3 framework adopts a technology-neutral approach, recognising multiple pathways to improve fleet efficiency, including electrification, alternative fuels and advanced fuel-saving technologies, according to Hyundai Motor India Ltd managing director and CEO Tarun Garg.

“The provisions for credit trading, pooling and flexible compliance mechanisms offer manufacturers greater flexibility while promoting innovation, investment and competitiveness in India's transition towards sustainable mobility,” Garg said in a statement.

CAFE norms were first notified by the government in 2017, under the Energy Conservation Act, 2001, to mitigate fuel consumption by lowering CO2 emissions, thereby cutting oil dependency, air pollution and aiding the government’s climate goals. These norms encourage automakers to produce more fuel-efficient vehicles to lower CO2 emissions.

The new norms provide flexibility to manufacturers to adopt cleaner technologies, alternative fuels and other innovative solutions.

“The final notification of CAFE-III norms is a positive step by the government towards advancing sustainable mobility in India and presents a clear long-term roadmap for the auto industry,” Garg said, adding that Hyundai remains committed to complying with all applicable regulatory norms and meeting current and future CAFE requirements.

“The norms provide a clear and predictable regulatory roadmap through a 3+2 year compliance block structure, enabling manufacturers to undertake long-term product and technology planning with greater certainty,” Garg explained.

Hyundai has already committed to a green portfolio share of 50% plus over the next 4 to 5 years, comprising cleaner technologies like EVs, Hybrids, and CNG-powered vehicles.

Shailesh Chandra, the MD and CEO of Tata Motors Passenger Vehicles, welcomed the government’s consultative approach in developing a framework that combines ambitious fuel efficiency targets with market-based compliance mechanisms.

“The continued recognition of zero-emission technologies reinforces the critical role of electrification in achieving India’s long-term decarbonisation objectives,” said Chandra.

“The clarity and predictability provided by the framework will enable the industry to plan investments, accelerate innovation and offer customers an increasingly compelling range of cleaner mobility solutions. At Tata Motors, we remain committed to leading this transition through sustained investments in electric mobility and other technologies that can meaningfully reduce emissions,” he added.