With the deadline for CAFE 2 norms set in 2022-23, automakers who don’t already meet the regulations have their work cut out
In 2014, the Indian government announced the new Corporate Average Fuel Efficiency (CAFE) norms which specified the minimum fuel efficiency (in liters/100) the passenger vehicles should meet. The CAFE norms were to be implemented in two phases.
CAFE 1 and 2
The CAFE 1 was implemented in 2017-18 and was specified for average vehicle kerb weight of 1,037 kg with a CO2 limit of 130.2 g/km. The CAFE 2 which is set to be implemented in 2022-23 mandates the OEMs to reduce their fleet’s average CO2 emission to 113 g/km based on an average vehicle kerb weight of 1,145 kg. In other words, each OEM’s CO2 target is based on the average kerb weight of all the vehicles sold by the brand during a specific period.
The Current Industry Status
According to JATO Dynamics’ recent white paper which analyzes the readiness of various automakers to meet the CAFE 2 norms, only 5 out of 25 players seem to have it covered. As per data for FY2019-20, the industry average CO2 emissions stood at 121 g/km for an average kerb weight of 1,085 kg. Meeting upcoming norms would take significant investment in technology and R&D.
Based on the current position and model lineup, and the CAFE 2’s target parameters, JATA Dynamics developed a dashboard for OEMs to compute the magnitude of delta required by each OEM to bridge the gap. The figures are sales-weighted and the database used for this analysis takes into account 25 main automakers in the Indian market, 172 models and 1,701 variants that were on sale during the April 2019 to March 2020.
Who Stands Where?
Maruti Suzuki, the country’s leading passenger vehicle manufacturer, currently tops the list with the least CO2 footprint of 108.6 g/km for an average kerb weight of 932 kg. Datsun and Renault find themselves in second and third place respectively and they are followed by Tata, Honda, Hyundai and Volkswagen.
Mitsubishi, Force Motors, JLR, Isuzu and Mercedes have some of the highest average CO2 figures. Of the 25 automakers considered, only 18 of them managed to meet the CAFE 1 norms and based on the current delta, only 4 of them have single-digit deficit to CAFE 2 norms.
The companies which are closest to meeting the CAFE 2 norms are BMW, Maruti Suzuki, Tata Motors and Audi which need only single digit drop in their respective fleet average CO2 emissions to meet the target. Interestingly, Volvo is the only automaker who is already meeting the CAFE 2 norms. In fact, the Swedish automaker’s CO2 level is 2.8 g/km better than the target.
JATO Dynamics’ CAFE 2 whitepaper report clearly indicates that most automakers in the country have quite some work to do in order to reduce their carbon footprint. Of course complying with the BS6 norms served as a major course correction but some automakers may have to implement hybrid and full electric solutions and make them sale successes in order to meet the target. It would be interesting to see how the companies go about this.