You may have to pay a lot more for a car as emission rules get stricter

Cars in India could get a lot more expensive owing to a latest step by India's energy efficiency and conservation agency. As automakers in India have to cut carbon emissions by a third over the next three years or face penalties under the third iteration of corporate average fuel efficiency norms (CAFE) by the bureau of energy efficiency (BEE), this could make cars pricier for you.

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An industry executive told Economic Times, “The challenge is not only to develop a vehicle which meets the stringent CAFE 3 and CAFE 4 norms, but also to price it such that there are buyers for them. You can make a low emission vehicle but if it is not priced affordably, there will be no takers and no benefit. It will impact the CAFE score of the company.”

The bureau of energy efficiency has asked industry stakeholders to submit their comments by the first week of July after which final guidelines will be notified. CAFE 3 norms will come into effect from April 2027 and the bureau of energy efficiency has proposed 91.7 gm CO2/km and 70 gm CO2/km in CAFE 3 and CAFE 4.

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A second senior industry executive said as per the outlet, "While the government has agreed to extend to five years the transition to CAFE 4, the targets outlined are tough. Not only would carmakers have to reduce carbon emissions and fuel consumption for the entire fleet in the next three years, these parameters will also be measured as per WLTP."

As per the proposal, if the average fuel efficiency of the cars exceeds by up to 0.2 litres per 100 km, the penalty is ₹25,000 per vehicle. In case, it exceeds this, the penalty is ₹50,000 per vehicle.