Hyundai Motor India Ltd (HMIL) is confident of meeting the upcoming stricter Corporate Average Fuel Efficiency (CAFE 3) norms, thanks to its robust powertrain strategy, diverse product portfolio, and upcoming model launches. The company has already achieved compliance with current CAFE requirements for FY26.
Speaking during a media call following the announcement of Hyundai Motor India’s Q4 and full-year FY26 results, Managing Director and CEO Tarun Garg expressed optimism about regulatory adherence.
“On the regulatory front, we have fully met CAFE requirements for FY26. For CAFE3, based on the recent draft, we have calculated the requirements and remain fully confident of meeting the compliance backed by our strong powertrain strategy,” Garg said.
CAFE 3 norms (also referred to as CAFE 2027 norms) are expected to take effect from April 1, 2027, and run through FY32. These standards aim to tighten fleet-wide CO₂ emission targets progressively, while offering incentives such as super credits for battery electric vehicles (BEVs), plug-in hybrids, strong hybrids, and other low-emission technologies. This framework is designed to accelerate the industry’s shift toward electrification and cleaner mobility.
Hyundai’s confidence stems from its balanced approach, combining efficient internal combustion engine (ICE) vehicles, hybrids, and an expanding EV lineup. The company’s diverse powertrain options and upcoming product interventions position it well to manage the more stringent requirements without major disruptions.
To drive growth and strengthen its EV portfolio, Hyundai plans to launch two new SUVs in FY27:
- A new mid-size SUV powered by an internal combustion engine.
- A compact electric SUV built on a localised dedicated EV platform.
This upcoming electric model will mark Hyundai’s debut of a mass-market, locally developed dedicated battery electric vehicle in the compact SUV segment. Garg highlighted the importance of this launch, noting that the company currently lacks a fully dedicated mass-volume EV model in its Indian lineup.
These launches align with Hyundai’s broader strategy to regain momentum in the competitive Indian market, where it aims for 8-10% domestic volume growth in FY27, supported by new products and network expansion.
Hyundai Motor India has committed around ₹7,500 crore in capex for FY27 to support new model development, capacity expansion, and electrification initiatives. This investment forms part of a larger long-term plan, with the company having already invested ₹40,700 crore in India and outlining an additional ₹45,000 crore between FY26 and FY30 for manufacturing, electrification, and future mobility solutions.
As CAFE 3 norms push the industry toward lower emissions, manufacturers like Hyundai are leveraging a mix of technologies. While hybrids provide a transitional solution, dedicated EVs are seen as critical for long-term compliance and sustainability goals. Hyundai’s move to localise EV production is expected to improve cost competitiveness and support the government’s push for domestic manufacturing and greener mobility.
With a strong existing portfolio that includes models like the Creta Electric and IONIQ 5, the addition of a localised compact EV SUV should help Hyundai broaden its appeal in India’s fast-growing electric vehicle market while ensuring regulatory readiness.
Hyundai’s proactive approach—combining compliance confidence, significant investments, and targeted product launches—positions the company strongly for FY27 and beyond in India’s evolving automotive landscape.
