Latest news with #CorporateAverageFuelEfficiency
Mint
3 days ago
- Automotive
- Mint
Govt discusses roadmap to implement stricter emission norms for four-wheelers
New Delhi: Several Indian ministries on Tuesday discussed the roadmap for implementing the proposed Corporate Average Fuel Efficiency (CAFE) III norms, set to take effect from 2032. The Union ministries of power, road transport, heavy industries, and petroleum met to strengthen the regulatory framework and reduce carbon emissions of four-wheeler vehicles, Union power minister Manohar Lal said on social media platform X. In June last year, the Bureau of Energy Efficiency (BEE) rolled out the draft norms which would come into effect from 2032. BEE proposed stringent targets to cut automotive emissions, while emphasizing battery electric vehicles as key to its clean mobility drive. India's Corporate Average Fuel Efficiency (CAFE) norms are regulations aimed at improving the fuel economy of four-wheelers by limiting the average carbon dioxide (CO2) emissions of an automaker's entire fleet of vehicles sold in a given financial year. They are a critical component of the government's efforts to reduce its reliance on fossil fuels, curb air pollution, and meet its climate goals. Indicating an intent to support low- and zero-emission technologies, BEE has also proposed incentives for carmakers to produce more battery EVs to avail higher fuel efficiency credits, even as EV sales volumes are stagnating. BEE has proposed 91.7 gm CO2 per km and 70 gm CO2/km in CAFE 3 and CAFE 4, respectively at WLTP (world harmonised light vehicles testing procedure). The current, operational CAFE-II norms came into effect in 2022. These norms are relevant for petrol, diesel, CNG (compressed natural gas), LPG (liquefied petroleum gas), hybrid and electric passenger vehicles. Vehicles covered under these norms include those having up to nine seats including the driver's seat and a gross vehicle weight not exceeding 3,500 kg. Commercial vehicles with gross weight of 12 tonne or more are covered under separate fuel efficiency norms that were finalized in August 2017. Under the current CAFE-II norms, the cap on emission by passenger vehicles was pegged at 113 gm CO2 per km. It was brought down from 130 gm CO2 per km under CAFE-I norms, which had come into effect in 2017.
Hindustan Times
21-05-2025
- Automotive
- Hindustan Times
Focus on vehicle efficiency to reduce GHG emissions
Sustainable transportation is a key aspect of reducing global carbon emissions to stem the climate crisis. The avoid, shift, improve, and fuel (ASIF) framework outlines a comprehensive approach to creating more sustainable transport systems. While much attention is given to alternative fuel technologies, particularly electric vehicles (EVs), the efficiency improvement strategy remains one of the least discussed but highly effective levers of sustainable transportation. This strategy, however, often gets overshadowed by the excitement surrounding new fuel technologies. While all other strategies, such as modal shift from private to public transport or road to rail transport, are important, efficiency improvement is a crucial yet under-appreciated policy lever. Efficiency improvement is typically a technical issue dealt with at the vehicle manufacturing and regulatory levels, but it is an area often overlooked in public discourse on sustainable transportation. A prime example of this is the Corporate Average Fuel Efficiency (CAFE) standards, which regulate the fuel efficiency of vehicles in terms of grams of carbon dioxide emitted per km. The Bureau of Energy Efficiency (BEE) in India has set strict fuel efficiency targets for the four-wheeler passenger vehicles segment (M1 category). Though the second phase of CAFE norms were rolled out for M1 in 2023, no such norms have been mandated for other categories of passenger and commercial vehicles. In case of heavy-duty vehicles (HDVs), a constant-speed fuel economy norm was rolled out in April 2023. Shifting to CAFE norms for HDVs can make manufacturers focus on high efficiency vehicles. This provides immediate and impactful results. As part of the regulations, both globally as well as domestically, lab-based test cycles are moving closer towards real-world driving cycles, called Worldwide Harmonised Light Vehicle Test Procedure (WLTP). The WLTP is considered closer to real-world driving conditions as compared to the earlier testing cycle, such as the Modified Indian Driving Cycle (MIDC), which was criticised for being far removed from on-road realities of driving behaviour or environment. Under the CAFE norms, manufacturers must meet corporate-level efficiency targets. This means that the average emissions from all the vehicles a manufacturer sells must be below the target set by the regulator. To help companies meet these targets, the regulator offers options like super credits for efficient models like EVs and hybrid EVs (HEVs), which offers flexibility to manufacturers to sell more electric or hybrid vehicles to offset sales of heavy, less efficient vehicles. India's regulatory framework is in line with global norms but suffers some lag. In 2027, Phase III of the CAFE norm is proposed to be mandated for implementation, setting even stricter standards for vehicle efficiency. The phased implementation of these norms allows vehicle manufacturers' time to adapt their designs, engineering, and portfolio to meet the upcoming targets. Penalties for non-compliance, based on the Energy Conservation (Amendment) Act 2022, remain substantial. When we look at the European Union's CAFE targets, we see a similar trajectory. From 2020 to 2024, the target for passenger vehicles was 95 grams of CO2 per km (under the New European Driving Cycle), and for 2025-2029, the target is 93.6 grams of CO2 per km. More ambitious targets are set for 2030-2034 (49.5 grams of CO2 per km), based on the WLTP. These targets reflect the global trend toward stricter emissions regulations and underscore the importance of efficiency improvement in the transport sector. As car sales continue to grow in India, the need for efficiency improvement becomes even more pressing. The growing popularity of SUVs, which tend to be larger and heavier, only exacerbates the challenge of reducing emissions. With rising car ownership and increasing fuel demand, India faces both environmental and economic challenges, with extremely high import dependency of 88% for fuel and the associated pressure on foreign exchange. Improving the efficiency of vehicles on the road, regardless of whether they run on fossil fuels, hybrid systems, or electricity, provides an immediate and effective solution to reducing emissions. Given that India has a long way to go before achieving high levels of EV penetration, which is currently just about 2.5% of total sales, focusing on efficiency improvement in the existing fleet could yield significant benefits in terms of reduced fuel consumption and emissions in the medium to long-term. Moreover, increased efficiency would reduce India's reliance on imported oil, helping to curb the nation's trade deficit and energy security. Sharif Qamar is associate director, and IV Rao is distinguished fellow, The Energy and Resources Institute (TERI). The views expressed are personal
Economic Times
29-04-2025
- Automotive
- Economic Times
Multi-fuels, exports can make Maruti a good ride
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel ET Intelligence Group: Maruti Suzuki India reported a sustained sales growth even though operating profit and margins took a hit. Despite rising costs from new operations and higher overheads, the company expects to outperform the industry in the current fiscal year, supported by new electric and SUV launches and a strong export outlook. Analysts remain upbeat, projecting up to 20% upside in the posted its highest-ever quarterly sales volume at 604,635 units, a 3.5% rise year-on-year. Sales have been increasing sequentially for the company since the September 2024 quarter. Retail sales growth outpaced wholesales in FY25, driving a marginal gain in the market share. Rural markets continued to perform better in the March quarter and also in standalone net sales grew by 6% year-on-year as well as sequentially in the March 2025 quarter to ₹38,848.8 crore while net profit declined by 4% year-on-year but increased 5% sequentially to ₹3,711.1 crore. After rising to 11.1% in the June 2024 quarter from 10.8% in the March 2024 quarter, operating margin (EBIT margin) declined gradually to 8.7% in the March 2025 quarter due to higher manufacturing overheads and administrative expenses, new plant costs, increased advertising spend and adverse commodity prices. The new plant at Kharkhoda in Haryana has an initial capacity of 250,000 units, taking the total installed capacity to 2.6 million per annum. Its commissioning in March 2025 impacted the company's margin by over 30 basis points in the March quarter. Start-up costs of the plant are expected to normalise after another quarter, according to Motilal Oswal Financial Services Maruti has planned two launches in FY26, the e-Vitara and a new SUV to outpace the modest industry growth expectation of 1-2%. It anticipates export growth of at least 20% year-on-year, mainly driven by these launches. It aims to sell 70,000 e-Vitara units, with the majority allocated for export markets."Overall, next year's growth is likely to be driven by exports, SUVs, and a further increase in CNG penetration, said Motilal Oswal Financial Services in a report citing concerns over rising input costs including that of steel. With an emphasis on growing the EV, hybrid, and SUV portfolios, the auto giant plans a capex of ₹8,000-₹9,000 crore in FY26. It also anticipates the implementation of new CAFE (Corporate Average Fuel Efficiency) standards notified by the government, which will tighten fleet-wide fuel efficiency requirements for automakers in Emkay and Motilal Oswal have both reiterated their 'buy' ratings, citing favourable valuations and visible growth drivers. Emkay pegs a target price of ₹13,500, while Motilal Oswal is more bullish with a target of ₹13,985, implying 15-20% upside from current levels. Despite some near-term margin pressures, Maruti's multi-fuel strategy, strong export thrust, and robust launch pipeline position it well for sustained growth.
Time of India
29-04-2025
- Automotive
- Time of India
Multi-fuels, exports can make Maruti a good ride
ET Intelligence Group: Maruti Suzuki India reported a sustained sales growth even though operating profit and margins took a hit. Despite rising costs from new operations and higher overheads, the company expects to outperform the industry in the current fiscal year, supported by new electric and SUV launches and a strong export outlook. Analysts remain upbeat, projecting up to 20% upside in the stock. Maruti posted its highest-ever quarterly sales volume at 604,635 units, a 3.5% rise year-on-year. Sales have been increasing sequentially for the company since the September 2024 quarter. Retail sales growth outpaced wholesales in FY25, driving a marginal gain in the market share. Rural markets continued to perform better in the March quarter and also in FY25. Agencies Maruti's standalone net sales grew by 6% year-on-year as well as sequentially in the March 2025 quarter to ₹38,848.8 crore while net profit declined by 4% year-on-year but increased 5% sequentially to ₹3,711.1 crore. After rising to 11.1% in the June 2024 quarter from 10.8% in the March 2024 quarter, operating margin (EBIT margin) declined gradually to 8.7% in the March 2025 quarter due to higher manufacturing overheads and administrative expenses, new plant costs, increased advertising spend and adverse commodity prices. The new plant at Kharkhoda in Haryana has an initial capacity of 250,000 units, taking the total installed capacity to 2.6 million per annum. Its commissioning in March 2025 impacted the company's margin by over 30 basis points in the March quarter. Start-up costs of the plant are expected to normalise after another quarter, according to Motilal Oswal Financial Services . Maruti has planned two launches in FY26, the e-Vitara and a new SUV to outpace the modest industry growth expectation of 1-2%. It anticipates export growth of at least 20% year-on-year, mainly driven by these launches. It aims to sell 70,000 e-Vitara units, with the majority allocated for export markets. "Overall, next year's growth is likely to be driven by exports, SUVs, and a further increase in CNG penetration, said Motilal Oswal Financial Services in a report citing concerns over rising input costs including that of steel. With an emphasis on growing the EV, hybrid, and SUV portfolios, the auto giant plans a capex of ₹8,000-₹9,000 crore in FY26. It also anticipates the implementation of new CAFE (Corporate Average Fuel Efficiency) standards notified by the government, which will tighten fleet-wide fuel efficiency requirements for automakers in India. Brokerages Emkay and Motilal Oswal have both reiterated their 'buy' ratings, citing favourable valuations and visible growth drivers. Emkay pegs a target price of ₹13,500, while Motilal Oswal is more bullish with a target of ₹13,985, implying 15-20% upside from current levels. Despite some near-term margin pressures, Maruti's multi-fuel strategy, strong export thrust, and robust launch pipeline position it well for sustained growth.
