Policy Brief

Role of fuel efficiency norms in accelerating sales of electric vehicles in India

India aims to boost the adoption of battery electric vehicles (BEVs) in part by setting a national goal of 30% of all vehicle sales in 2030 being BEVs. Corporate average fuel economy (CAFE) standards can help achieve this goal by encouraging manufacturers to produce and sell more BEVs to meet fleet-wide emission targets. CAFE standards also encourage manufacturers to continue improving technology in internal combustion engine vehicles (ICEVs) to reduce emissions.

This policy brief examines how automotive manufacturing has evolved in India over the last three decades, the impact of India’s current CAFE standards, a case study of emission standards in Europe, and the potential for the next phase of CAFE standards in India to increase BEV sales to 30% of all vehicles.