A lot can happen over CAFE, as govt brews new fuel-efficiency norms for cars

Illustration by Sadhana Saxena via AI.

Synopsis
The government wants to roll out the next phase of Corporate Average Fuel Efficiency (CAFE) norms. It targets a 47% cut in passenger vehicle fuel consumption by 2032. This will give EVs a leg-up, but regular car prices will rise. If a carmaker selling a million vehicles misses its CAFE target, it will face an INR2,500-INR5,000 crore fine every year.

The pendulum of fate is swinging for carmakers. For, the post-pandemic revenge buying is cooling down with passenger car retail sales dropping 1% in May 2024 over a year-ago period. Carmakers also have one more curveball thrown at them. To cut vehicular pollution, the government is working on a plan to roll out a far more stringent Corporate Average Fuel Efficiency (CAFE) norms. A 10-year road map (2027-2037) on this is being prepared by the