Two contrasting positions have emerged within India’s top automakers over the future of CAFE compliance.
14 Nov 2025 | 3248 Views | By Prerna Lidhoo and Darshan Nakhwa
Tata Motors Passenger Vehicles MD & CEO Shailesh Chandra has taken a firm stand against proposals to dilute CAFE norms for small cars, calling any weight-based relaxation “unjustified, unsafe, and misaligned with India’s green mobility goals.”
Chandra’s strong remarks came during Tata Motors’ Q2 FY26 earnings call, amid industry ...
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Tata Motors Passenger Vehicles MD & CEO Shailesh Chandra has taken a firm stand against proposals to dilute CAFE norms for small cars, calling any weight-based relaxation “unjustified, unsafe, and misaligned with India’s green mobility goals.”
Chandra’s strong remarks came during Tata Motors’ Q2 FY26 earnings call, amid industry discussions around easing CAFE requirements for smaller, more affordable vehicles through a new 909 kg weight threshold.
Calls for CAFE Concessions “Misplaced”
Chandra clarified that the core purpose of CAFE regulations is to push automakers towards greener powertrains at a fleet level, not to create exemptions for specific categories.
“CAFE has intended to drive OEMs towards greener technologies at a portfolio level. There are no specific targets for individual segments.” He stressed that OEMs already have the flexibility to balance their fleet mix, and small cars do not need special regulatory treatment to comply.
Maruti Suzuki has reportedly warned that the proposed Corporate Average Fuel Efficiency (CAFE) 3 norms, based on a weight-based formula, could unfairly penalise small cars, which make up a significant part of its portfolio. According to news reports, Chairman R.C. Bhargava said the current framework “actually favours bigger cars” by setting less stringent targets for heavier models while imposing stricter standards on lighter vehicles, which Maruti argues undermines the affordability and environmental benefits of compact cars in the Indian context.
Tata Motors Confident on CAFE Compliance
Positioning Tata Motors’ own performance as evidence, Chandra noted that the company remains one of India’s largest small-car manufacturers. “We are the second-largest producer of small cars with over 85% of our sales from this segment — and we have absolutely no concerns in meeting CAFE norms.”
Tata Motors, therefore, sees no justification for concessions either for small cars or any other category.
Sharp Critique of Weight-Based Definition
A key concern for Chandra is the proposal to classify small cars using weight rather than the long-standing GST-based definition of length and engine capacity.
He warned that adopting weight as a criterion would have unintended consequences.
Chandra underlined that lighter vehicles generally fail to meet crashworthiness standards, noting: “No car below 909 kg meets NCAP safety ratings. Encouraging lighter vehicles would undermine the progress India has made on safety.”
He also challenged the assumption that lightweight equals affordable, pointing out that many cars around the proposed weight threshold are priced close to ₹10 lakh.
“With minor weight reduction, even relatively expensive cars could qualify. This makes the affordability argument weak.”
He added that the proposed shift ignores how customer preferences have evolved. Buyers in the sub-4m space increasingly prefer compact SUVs — safer, better-equipped vehicles — often at similar price points.
“Diluting Norms Distracts From Sustainable Mobility”
Chandra argued that reopening the small-car debate takes attention away from India’s most important transition — the move towards EVs, CNG, flex fuel, and other greener technologies.
“Diluting emission norms based on weight distracts from concrete actions toward sustainable mobility. The focus must remain on green technologies, not exemptions.”
Implications for Industry Policy
Chandra’s unequivocal stance positions Tata Motors as one of the few large OEMs publicly opposing any relaxation in CAFE norms. This could weigh significantly as policymakers review compliance trajectories under CAFE Phase 3.
The comments also reinforce Tata Motors’ own strategy and product momentum — strong EV and CNG contribution (45% of PV mix), sustained response to the Nexon EV and Harrier EV, and a robust pipeline including the Sierra EV and updated Harrier/Safari Patrol.
Recently, R.C. Bhargava, Chairman of Maruti Suzuki--India largest small car manufacturer--criticised the stance taken by most members of the Society of Indian Automobile Manufacturers (SIAM), after the industry body rejected a revised proposal that sought to ease fuel-efficiency norms for lighter cars. He pointed out that four automakers including Maruti Suzuki, Renault, Toyota Kirloskar and Honda, which together produce nearly two-thirds of India’s passenger vehicles, supported the revised framework because they believed it aligned better with national priorities.
The Bureau of Energy Efficiency’s (BEE) updated draft on Corporate Average Fuel Efficiency (CAFÉ) norms proposed a more flexible approach for smaller petrol cars. It recommended additional emission deductions for vehicles weighing up to 909 kg, with engines up to 1,200 cc and lengths under 4,000 mm. This effectively offered lighter cars a 3 g/km relaxation in their declared CO₂ emissions, recognising that smaller, mass-market models inherently contribute to lower emissions.
However, SIAM informed the BEE that member companies could not reach a consensus on the proposal. With the industry split, the final decision has now been left to the BEE. Bhargava emphasised that the supporting companies backed the draft even though some of them do not have a significant presence in the small-car segment--a move he framed as being driven by broader considerations rather than business self-interest.
(With inputs from Ketan Thakkar)