According to a senior government official, the government is investigating legal options against electric two-wheeler companies for failing to adhere to the FAME II scheme norms.
In response to seven manufacturers of electric two-wheelers claiming incentives while failing to follow the rules of the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme, the Centre has issued demands totaling Rs 469 crore to them.
Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto have all agreed to refund government incentives. The companies have received notices, according to the official, but only Revolt Motors has so far offered to refund the money.
“We have sent them notices. So far, only Revolt has offered to pay…others have not responded,” the official said. He noted that the deadline is almost over, and next week, the government will be making some decisions. “We are examining legal options,” he said when asked about action being considered by the government.
According to a heavy industries ministry investigation, these businesses took advantage of the program’s tax incentives by breaking the rules. The investigation revealed that these seven firms allegedly used imported components, despite the fact that the rules of the scheme allowed incentives to be used to produce electric vehicles using made-in-India components.
After receiving anonymous emails claiming that several EV manufacturers were claiming subsidies without abiding by the Phased Manufacturing Plan (PMP) rules to increase domestic manufacturing of these electric vehicles, the ministry launched the investigation. Following that, the ministry postponed the allocation of subsidies for the previous fiscal year.
The seven electric two-wheeler makers have urged the government to look at the possibility of asking customers to pay back excess rebates availed by them on the purchase of the vehicles. The companies have suffered a cumulative loss of over Rs 9,000 crore on account of unpaid dues and loss of market after their subsidies were stopped last year, the Society of Manufacturers of Electric Vehicles (SMEV) has stated.
To promote electric and hybrid vehicles, a Rs 10,000 crore-programme under the FAME-II scheme was announced in 2019. It is the expanded version of the FAME scheme, launched on April 1, 2015, with a total outlay of Rs 895 crore. In three-wheeler and four-wheeler segments, incentives are applicable mainly to vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus is on private vehicles.
