Govt May Drop Special Carve-Out for Small Cars in CAFE 3 Norms

• The Bureau of Energy Efficiency (BEE) is considering removing the special dispensation for small cars (under 909kg) from the final CAFE-III norms.
• Instead of a carve-out, BEE plans to recalibrate the core formula, potentially easing compliance for vehicles under 1,229kg and tightening for heavier models.
• The rethink follows strong opposition from automakers like JSW MG Motor, Tata Motors, and Kia, who argued the carve-out unfairly favored a single carmaker.
• The final notification, expected to modify the September 2025 draft, could offer incremental relief of 4.51-5.31g/km per year for 909kg cars from FY28-FY32.
• CAFE-III norms, effective April 1, 2027, introduce a weight-linked annual fuel-consumption formula, replacing a single fixed limit.

Why It Matters: BEE may remove special exemptions for small cars in CAFE 3, opting for a recalibrated weight-linked formula.