CAFE-3 norms drop small-car concession, add tradable credits from April 2027
The Ministry of Power notified CAFE-3 norms effective April 1, 2027, to March 31, 2032, removing the small-car concession and introducing tradable compliance credits. Amitabh Kant criticised the framework’s 11 per cent electric-car target by 2032 as a missed opportunity.
Read the source at Business Standard (via Wayback)The numbers
| Removed small-car concession weight ceiling: | 909 kg |
|---|---|
| Strong-hybrid compliance factor: | 1.6x |
Why it matters to operators and investors
Rework model mix and pricing ahead of April 2027 as small-car relief ends and BEVs and range-extended EVs gain 3x compliance weighting versus 1.6x for strong hybrids.
What to watch next
- Ministry of Power guidance on credit eligibility and transfers
- Maruti Suzuki announcements of small-car price or portfolio changes
- Tata Motors disclosures of compliance-credit sales
- Toyota announcements of additional battery-electric offerings
- Disclosed compliance-credit transaction prices
The counter-case
This is not yet a clear EV-demand catalyst. Tradable credits could let manufacturers buy compliance instead of rapidly electrifying, while the 3x accounting factor means relatively modest EV volumes may deliver substantial compliance benefits. Removing the small-car concession could also pressure entry-level pricing and margins rather than accelerate affordable EV adoption.