India's CAFE 3 norms favour EV suppliers, ease compliance burden for OEMs, say BofA, Nomura

UNO Minda

01/10/2026 08:20

** India's notified CAFE 3 (Corporate Average Fuel Efficiency) framework gives automakers long-awaited policy visibility and accelerates shift towards electricification, according to Nomura and BofA Securities
** Under the notification, a 17% cut in carbon dioxide emissions is targeted, applicable from April 1, 2027 to March 31, 2032
** BofA says the norms give original equipment makers policy certainty to execute on their power train strategy
** Adds norms are less stringent than the headline targets suggest and sees them as a relief for Mahindra & Mahindra MAHM.NS, often seen as most vulnerable to tighter CAFE norms
** Nomura says EV penetration in the passenger vehicles segment has risen to 7.8% in September 2025 from 4% in FY2026    
** Sees Sona BLW SONB.NS, Uno Minda UNOI.NS, Motherson Sumi MSWI.NS and Samvardhana Mothers SAMD.NS are key beneficiaries of the new norms
** Auto index .NIFTYAUTO down 3.4% on the day, dragged by Bajaj Auto BAJA.NS, Mahindra & Mahindra MAHM.NS on modest rise in September sales; Nifty down 0.8%

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))