India's CAFE 3 norms favour EV suppliers and ease compliance for OEMs, say BofA, Nomura
INDA•India's CAFE 3 framework targets a 17% cut in carbon dioxide emissions from April 1, 2027, to March 31, 2032. BofA says the norms offer automakers policy certainty and are less stringent than headline targets suggest, while Nomura names four auto suppliers as key beneficiaries.
1. New emissions framework
India's notified CAFE 3 framework gives automakers long-awaited policy visibility and accelerates the shift towards electrification, according to Nomura and BofA Securities. The framework targets a 17% cut in carbon dioxide emissions and applies from April 1, 2027, to March 31, 2032.
2. Automakers and suppliers
BofA says the norms give original equipment makers certainty to execute their powertrain strategies and provide relief for Mahindra & Mahindra, which it says is often seen as most vulnerable to tighter CAFE norms. Nomura names Sona BLW, Uno Minda, Motherson Sumi and Samvardhana Motherson as key beneficiaries.
3. EV adoption and shares
Nomura says electric-vehicle penetration in the passenger-vehicle segment rose to 7.8% in September 2025 from 4% in FY2026. India's auto index fell 3.4%, dragged by Bajaj Auto and Mahindra & Mahindra on modest September sales gains, while the Nifty fell 0.8%.
