India’s 2nd Draft of Corporate Average Fuel Efficiency (CAFE) Standards

The Bureau of Energy Efficiency (BEE) in India published the latest draft of the Corporate Average Fuel Consumption (CAFE) standards for the automotive industry, known as "CAFE-III," on September 25, 2025, and is inviting public comments. CAFE is calculated based on the average fuel consumption of all vehicle models sold over a year, regardless of the individual model, and requires automobile manufacturers to meet prescribed fuel consumption standards for the vehicles they produce. CAFE-III, which follows the current CAFE-II, will be applicable during FY2027 through FY2032. While drafts of CAFE-III and CAFE-IV (for FY2032–2037) were already released in 2024, the latest draft limits the target vehicles only to M1 category vehicles (mainly four-wheelers), changes the standard values for CAFE-III, and completely removes any mention of CAFE-IV.