Mahindra takes on Maruti in CAFE battle | Report

Mahindra is the largest SUV manufacturer in India in terms of volume.

Homegrown SUV manufacturer Mahindra & Mahindra has opposed any kind of relief being granted to the country's largest carmaker, Maruti Suzuki India, for its small cars in the upcoming stages of the Corporate Average Fuel Efficiency (CAFE) norms, according to a report by Business Standard.

While India is currently in the second phase of the CAFE norms, the third stage will become effective from April 2027.

The CAFE norms, which are primarily aimed at reducing carbon dioxide (CO2) emissions from vehicles, have been introduced in two phases so far. While CAFE I standards arrived in 2017–18, the CAFE II norms became effective in 2022–23.

The passenger vehicles (PVs), powered by petrol, diesel, LPG and CNG, as well as hybrid and electric models, having a gross vehicle weight of less than 3,500 kg, are covered under CAFE norms.

For reference, the amount of fuel a car consumes is directly related to the amount of CO2 it emits.

Maruti is seeking relief under the upcoming stages of CAFE norms for its small cars, primarily weighing less than 1,000 kg, with the argument that they have lower CO2 emissions than relatively larger vehicles.

As per the report, Mahindra, in a letter dated July 9 to the Ministry of Road Transport and Highways (MoRTH), argued that small cars contributed around 60% to domestic PV volumes in FY25 but had a share of 53% in the CO2 emissions in the industry.

Mahindra used the GST guidelines for defining small cars, those that are under 4 metres in length and have an engine capacity up to 1,200 cc in case of petrol, and 1,500 cc in case of diesel.

"Granting concessions would not only perpetuate this level of emission but also lock it in for the future by removing CAFE penalty avoidance incentive for innovation in this segment towards fuel efficiency and lower emission," the report quoted Mahindra as saying.

"Our national goal of 30% EVs by 2030 will take a hit if only larger cars focus on EVs. Globally, original equipment manufacturers meet CAFE targets by intentionally deploying EVs in their vehicle line-ups, regardless of the size of the cars," it added.

Mahindra offers internal combustion engine (ICE) SUVs like the Bolero, Bolero Neo, XUV 3XO, Thar, Thar Roxx, Scorpio Classic, Scorpio-N and XUV700. Its electric vehicle (EV) portfolio includes the XUV400, BE 6 and XEV 9e.

Apart from Mahindra, companies like Tata Motors, Toyota Kirloskar Motor and JSW MG Motor India have reportedly opposed Maruti's call for easing of fuel efficiency standards for small cars.