Automakers including Tata Motors and Mahindra & Mahindra have withdrawn concessions for small cars that were planned for India in upcoming fuel economy rules, according to a government document. He argued that only one company would benefit.
A draft carve-out in September proposed generous treatment for gas-powered cars weighing less than 909 kg (2,004 lb), but the carve-out was widely seen as favoring Maruti Suzuki, which controls 95% of India’s small car market.
India’s power ministry has now removed this exemption and tightened other conditions, increasing pressure on all automakers to expand sales of electric and hybrid vehicles, according to the latest 41-page draft seen by Reuters.
The new rules aim to curb over-compensation for vehicle weight, level the playing field between light and heavy vehicle manufacturers, and are designed to deliver real efficiency gains, the document said.
They added that they would introduce “substantively significant reduction pathways” in emissions.
The Ministry of Power did not respond to a request for comment.
Promoting electric hybrid models
Transport accounts for about 12% of India’s energy use and is a major contributor to oil imports and carbon emissions. According to the document, passenger cars account for almost 90% of transport-related emissions.
Corporate average fuel efficiency standards define the allowable CO2 emissions across a manufacturer’s fleet of passenger vehicles weighing less than 3,500 kg (7,716 lb). Updated every five years, automakers promote cleaner technologies such as electrification, compressed natural gas, and flex fuels.
The new rules will apply for five years from April 2027 and will be at the heart of automakers’ product and powertrain investment plans. It was not immediately clear when the rules would be finalized.
The September draft would have allowed fuel consumption targets to be raised faster based on vehicle weight, easing compliance for manufacturers of heavier vehicles such as Mahindra, Tata and Volkswagen, while tightening requirements for lighter vehicle manufacturers such as Maruti. That imbalance prompted the carve-out.
The revised plan reduces the scope for heavier vehicles to obtain more relaxed targets.
“Manufacturers with larger fleets…need to achieve stronger intrinsic efficiency improvements,” the document states.
The credit system rewards companies that sell more EVs and plug-in hybrid vehicles and allows for the pooling of fuel consumption records between companies. Violations are subject to fines of up to $550 per vehicle.
The revised plan aims to reduce average vehicle emissions from 114g/km to around 100g/km over the five years to March 2032. Including credits, that weight could drop to 76 g/km by 2032, when electric models reach 11% of total car sales.
(Reporting by Aditi Shah; Editing by Mark Potter)
