India's truck and bus manufacturers, including Tata Motors and Mahindra & Mahindra, have requested the Government to exempt small commercial vehicles (SCVs) with a maximum weight not exceeding 3.5 tons from the stricter Corporate Average Fuel Efficiency (CAFE) norms.

The request cites affordability concerns, similar to those raised regarding the easing of emission norms for small cars under the proposed CAFE 3 regulations.

"Mandating CAFE norms for this segment (N1 - SCVs under 3.5 tons) at this point in time would impose additional cost burdens, affect affordability, and impact the livelihood of owner-operators and small businesses," the companies stated in a presentation submitted to the Government.

"In view of this, we reiterate the request to exempt the N1 category from CAFE regulations at this stage." A copy of the presentation has been reviewed by the press.

According to the manufacturers, approximately 80% of small CV owners are driver-operators who rely on their vehicles for income.

In India, purchasing a new vehicle typically requires more than 40 months of income, compared to 9-10 months in Europe. Additionally, annual earnings for an SCV owner in India generally range between Rs. 500,000 and Rs. 1,250,000 (US$ 5,860-14,650), making the segment price-sensitive.

The manufacturers also noted that, similar to the small car segment, limited access to low-interest loans from state-run banks and greater reliance on non-banking financial institutions - which often charge higher interest rates - contribute to increased vehicle acquisition costs.

Urban operational restrictions, such as time-of-day limits, further reduce asset utilisation and the return on investment (ROI). On this basis, the companies have requested a relaxation of the regulations.

The commercial vehicle sector's position on CAFE norms coincides with concerns raised by some car manufacturers about Maruti Suzuki's proposal to the Central Government for more lenient fuel efficiency requirements for small cars.

Maruti Suzuki has stated that compliance with more stringent emission standards may increase vehicle costs to a level that would be unaffordable for entry-level buyers.

The commercial vehicle manufacturers further stated that, if SCVs are exempted from CAFE norms, the industry will adopt a data-based approach to policy assessment.

Manufacturers would provide annual reports to the Bureau of Energy Efficiency (BEE), including data on N1 vehicle sales by manufacturer, fuel-type distribution, and fleet-average CO₂ emissions for the N1 category.