Eight major carmakers, including Hyundai, Mahindra, Kia, and Honda, are likely to face penalties amounting to ₹7,300 crore for exceeding fleet emission norms for the financial year 2022-23, as per reports of The Financial Express. The penalties arise from non-compliance with India’s Corporate Average Fuel Efficiency (CAFE) standards, enforced by the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
Key Penalties:
- Hyundai: ₹2,837.8 crore (highest among all manufacturers)
- Mahindra: ₹1,788.4 crore
- Kia: ₹1,346.2 crore
- Honda: ₹457.7 crore
- Renault: ₹438.3 crore
- Skoda: ₹248.3 crore
- Nissan: ₹172.3 crore
- Force Motors: ₹1.8 crore
The penalties reflect excess fuel consumption and carbon emissions beyond the mandated thresholds of 4.78 litres per 100 km and 113 grams of CO2 per km for FY23. However, automakers are contesting these fines, arguing that stricter CAFE norms were enforced only from January 1, 2023, and penalties should not apply retrospectively for the full fiscal year.
Background:
The CAFE norms were tightened in FY23 to promote fuel efficiency and reduce carbon emissions. These regulations aim to align the auto industry with India’s broader sustainability goals, but they have become a significant compliance challenge for manufacturers.
Financial Impact:
The penalties represent a significant burden, with Hyundai’s estimated fine equivalent to nearly 60% of its FY23 profit of ₹4,709 crore. For Mahindra, the penalty accounts for a substantial portion of its profit as well.
This development highlights the increasing regulatory pressures on automakers and their need to accelerate transitions to cleaner technologies.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Always verify details before making business or investment decisions.
