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EV may become cheaper in the coming days. The central government has announced CAFE-3 rules for passenger trains. These rules will be applicable from 1 April 2027 to 31 March 2032.
According to the new rules, one electric car will be counted equal to three cars while calculating the overall average of a car company. This rule will be applicable to M1 category passenger trains falling under the Central Motor Vehicle Rules, 1989.
The main objective of these rules is to increase the mileage of vehicles and reduce pollution. In such a situation, it will be necessary for auto companies to increase the share of high mileage petrol-diesel cars as well as EV and hybrid vehicles in their portfolio.
To sell more and more EVs, companies will launch budget and affordable EV models. When there will be competition in the market among companies like Tata, Mahindra, Hyundai, Maruti and MG to sell cheap EVs, then customers will get the direct benefit of aggressive pricing.
What is changing in CAFE 3 compared to CAFE 2?
Current rules (CAFE 2): The current CAFE 2 rules are in effect from April 2022. The government applies this rule not on any one car, but on the total average of all the cars sold by the company. The heavier the vehicle, the higher the oil consumption.
Therefore, to set the mileage target, the government has fixed a scale i.e. the average weight of the cars at 1,082 kg. Based on this weight, the companies have been given a target that the average mileage of all their cars should be 20.92 km/litre. Also, the pollution emitted from them must be less than 113 grams per km.
New Rules (CAFE 3): The CAFE 3 rules, which will come into effect from April 1, 2027, will be much stricter than before. Under the new rules, the average carbon dioxide emissions of the companies’ fleet will have to be reduced to 91.7 grams per km between 2027 and 2032.
Currently this limit is 113 grams per km, which means pollution will have to be reduced by about 19%. Along with this, the average mileage of vehicles will have to be increased from the current 20.92 km/litre to approximately 25.7 km/litre. Companies will have to achieve this target in 5 years.
Benefit of ‘super-credit’ will be available on EV and hybrid cars
To increase the sales of pollution reducing vehicles, the government has made a rule to give ‘super-credit’ to the companies. That is, the more eco-friendly vehicles the company sells, the more they will be counted in the records. This will make it easier for companies to meet the total mileage target:
- Pure Electric Car (EV): You will get 3 times credit. That means if the company sells 10,000 EVs, then it will be counted as 30,000 vehicles in the government calculations.
- Plug-in Hybrid and Flex-Fuel Hybrid: You will get 2.5 times credit.
- Strong Hybrid Cars: You will get 1.6 times credit.
- Flex-Fuel Cars: You will get 1.1 times credit.
What are the CAFE rules and how are they calculated?
CAFE are mileage and pollution regulations set by the government for car companies. Under this, a total score is calculated by combining the average weight, oil consumption and smoke emitted by all the vehicles sold by the company in a year.
This does not mean at all that every car of the company will have to give fixed mileage. Rather, the ‘overall average’ of all small cars, large SUVs, hybrids and EVs sold by the company should be within the rules set by the government.
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