CAFE-3 Norms notified with benefit to all; debate ends for small cars vs big cars; EVs vs non-EVs
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓The Centre notified the CAFE-3 norms on September 29, ending long debates between small and big car makers.
- ✓These rules start from April 1, 2027, and stay until March 31, 2032.
- ✓The new framework gives benefits to all alternate-fuelled vehicles, not just EVs, while setting balanced fuel efficiency targets.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Business Line
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
After much debate and deliberation since April 2024, the Centre has notified the third phase of Corporate Average Fuel Economy (CAFE-3) norms that ends the debate of small versus big cars or electric vehicles (EVs) versus non-electric vehicles.
The auto industry was divided between two groups - one led by Maruti Suzuki India for some special consideration for small cars, and the other led by Tata Motors which pitched for benefits for EVs and bigger cars.
The first draft was shared with the auto industry in April 2024. It was then put on public notice in June 2024, and an amended draft was put up for discussions in September 2025, which was highly debated for favouring small cars and stringent norms for bigger, gas-guzzling vehicles. The government then came out with certain changes in April this year and a final draft was notified with no changes in July 2026.
Unlock the Full Story with ArthNow Premium
To continue reading this complete financial story and in-depth market context, upgrade to ArthNow Premium. Enjoy unlimited access across Web and Mobile.
Business Line
Read the full, original unfiltered story directly on the publisher's portal.