Mahindra & Mahindra (M&M) and Hyundai Motor India , two of India’s top four automakers, will have to work harder than their peers to comply with the upcoming CAFÉ 3 regulations — rules that are set to favour smaller cars, hybrids, and flex-fuel vehicles.

The revised Corporate Average Fuel Economy 3 (CAFÉ 3) norms, scheduled to take effect from April 1, 2027, will be more stringent than the current standards, introducing tighter carbon dioxide (CO₂) emission limits. The new target is 88.4 g/km, compared to the earlier proposal of 91.7 g/km and the existing CAFÉ 2 benchmark of 113 g/km.

Automakers like Tata Motors, which benefits from a larger share of EVs in its portfolio, and Maruti Suzuki India (MSIL), which has a strong base of small car sales, are relatively well positioned to me

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