CAFE 3 Draft Norms Unveiled: Big Boost For EVs, Hybrids & Flex-Fuel Vehicles From April 2027

The government has released the draft CAFE 3 norms, introducing stricter fuel efficiency standards for passenger vehicles from April 2027. Chetan Bhutani, Business Today TV, explained that the new framework allows automakers to earn, trade, or carry forward compliance credits while offering additional incentives for electric vehicles, hybrids, and flex-fuel models. Battery EVs, ethanol-blended fuel vehicles, CNG, and biofuel-powered vehicles will receive compliance benefits, encouraging cleaner mobility. The proposed rules could significantly benefit companies with strong EV portfolios while pushing SUV-focused manufacturers to expand investments in electric and alternative fuel technologies.