Why new car, SUV price has gone up after BS6 Phase 2 norms

Bharat Stage 6 Phase II (BS6.2), also known as Real Driving Emissions (RDE) norms, were implemented on April 1, 2023, and have resulted in car prices going up. These new norms require manufacturers to add hardware to cars and SUVs to meet the more stringent emissions norms.

What are Real Driving Emissions norms?

Under the RDE norms, all cars need to achieve emissions targets in real-world conditions that co-relate with tests conducted in laboratory conditions under the Modified Indian Drive Cycle (MIDC). In the laboratory, cars follow a fixed set of parameters – speed, time and distance – whereas, in the real world, cars are subjected to bursts of acceleration, frequent changes in speed as well as everyday traffic; hence, an RDE test.

These new norms are needed to reduce the gap in emissions between laboratory tests and those produced in the real world. RDE norms were primarily introduced to reduce the impact of smart software on lab-based emissions tests, such as the one responsible for the Dieselgate emissions scandal.

Why have car prices increased?

Upgrading cars to meet the new emissions norms is no small feat. While most petrol-powered cars were able to do this primarily with a small software update, diesel-powered cars had to add new hardware.

For the BS6 norms introduced in 2020, cars could manage with the Lean NOx Trap (LNT) system as it was simpler and more cost-effective. However, some shifted to the Selective Catalytic Reduction (SCR) system. Now, most diesel-powered cars would require the adoption of an SCR system to meet the more stringent emissions norms.

Shifting to SCR systems requires cars to be fitted with new hardware such as an additional tank for the diesel exhaust fluid (DEF) – commonly known as AdBlue – as well injectors for DEF and an inlet to fill the DEF tank. While many manufacturers integrated the DEF filler in the same cavity as the fuel filler, cars like the Mahindra Scorpio Classic have two fuel filler lids on its rear fender – one on each side – where the left one is used to fill diesel and the right for DEF. In addition to the added parts, it also becomes difficult for manufacturers to package all the new hardware.

Price hikes in the past six months

In January 2023, many manufacturers announced a price hike for their respective portfolios citing rising input and logistics costs. However, it is believed that prices were also hiked due to the new emissions norms.

Mahindra hiked prices of the Scorpio N by up to Rs 1 lakh. When it was launched in June 2022, it was priced between Rs 11.99 lakh-23.90 lakh, but now it retails between Rs 13.05 lakh-24.51 lakh, going up roughly by Rs 1.5 lakh.

The Thar RWD was launched in January, priced between Rs 9.99 lakh-13.49 lakh, whereas it now retails between Rs 10.54 lakh-Rs 13.49 lakh. It is interesting to see that the petrol Thar RWD has received no hike, but the diesel version sees a jump of around Rs 1 lakh. This is because the diesel Thar RWD required additions to the hardware to meet the new, stringent norms. 

Similarly, MG has had an interesting case in its portfolio. While the facelifted Hector was launched in January, MG had been hiking prices of the pre-facelift Hector since September, after which it was priced between Rs 14.43 lakh-20.36 lakh. The facelifted Hector's prices started at Rs 14.73 lakh and went all the way up to Rs 21.73 lakh.

Now, three months since its debut, the Hector facelift retails between Rs 16.33 lakh-22.11 lakh. The diesel version of the Hector has seen a hike of up to Rs 60,000, while the petrol versions only see a hike of up to Rs 35,000. 

MG updated the Gloster SUV in August and at the time it was available between Rs 31.99 lakh-40.77 lakh. However, MG has since discontinued the base variants and it now retails between Rs 39.60 lakh-Rs 42.38 lakh. It got a price hike of up to Rs 1.61 lakh, depending on the variant. 

After the price hike in November 2022, the Tata Nexon retailed between Rs 7.70 lakh-14.18 lakh. In February, Tata again hiked the prices for the petrol and diesel-powered Nexon by Rs 10,000 and Rs 15,000, respectively. With this, the Nexon now retails for Rs 7.80 lakh-14.30 lakh.

Cars discontinued due to BS6 Phase 2 emissions norms

These new emissions norms majorly saw a few diesel-powered cars getting discontinued as it became expensive to adapt them. Additionally, it also saw vehicles selling in low volumes getting discontinued altogether.

*all prices ex-showroom

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