It puts the country’s largest carmaker under near-term strategic pressure. At the core of the issue is Maruti’s product mix and technology roadmap.
The company has traditionally focused on small, fuel-efficient petrol cars, with a gradual pivot toward strong hybrids as a bridge to electrification. However, the new draft norms have reduced the super-credit benefit for strong hybrids (from 2.0x to 1.6x) and removed additional concessions for small cars. This effectively erodes Maruti’s earlier advantage under the previous framework.
While the introduction of three-year compliance blocks (FY28–30, FY30–32) offers some flexibility, the broader policy direction remains firmly tilted toward accelerating EV adoption. This is where Maruti appears relatively less prepared compared to peers. Its EV pipeline is still at an early stage, with meaningful scale expected only over the next few years.
In contrast, competitors like Mahindra & Mahindra and Tata Motors PV already have strong EV strategies and product visibility, making it easier for them to align with tightening emission targets.
Even estimates suggest Maruti will require a lower EV mix (1–3% initially), but future tightening of norms could demand faster EV ramp-up. Additionally, the option to purchase carbon credits provides a compliance backstop, but at a cost, potentially impacting margin if internal transition lags.
The key overhang, therefore, is strategic. Should Maruti double down on hybrids or accelerate EV investments? With policy incentives for hybrids now diluted, the company may need to recalibrate its long-term approach.
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