Report: Four electric two-wheeler Manufacturers under fire for apparantly misusing of subsidy

The government is investigating allegations that four major electric two-wheeler manufacturers artificially kept their product prices low in order to claim subsidies. According to senior government officials, Ola, Ather, TVS Motor, and Vida are under investigation for allegedly mispricing their electric two-wheelers in order to qualify for subsidies under the scheme Faster Adoption & Manufacturing of Electric Vehicles (FAME). They added that the EV makers may have falsely claimed at least $300 million in subsidies.

The government is investigating a dozen other electric two-wheeler manufacturers for allegedly failing to meet the scheme’s localisation commitments.

The Ministry of Heavy Industries launched the latest investigation in response to a whistleblower complaint alleging that these four companies fraudulently claimed subsidies totaling at least Rs 300 crore by billing integral parts such as the charger and proprietary software separately from the two-wheeler.

electric two-wheelers
credit: economictimes

Subsidies cannot be claimed under the FAME programme for electric two-wheeler that cost more than 1.50 lakh ex-factory. It is alleged that these manufacturers billed customers separately for chargers and proprietary software in order to price the vehicles below the eligibility threshold required for the subsidy. Ola denied the allegations and stated that it had received no communication from the ministry on the subject.

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Companies can offer up to 40% off the cost of locally manufactured vehicles and claim it as a government subsidy. This enables companies to make EVs more affordable and increase sales. According to the gazette notification for the current round of the scheme, Rs 2,000 crore has been set aside for financial assistance to manufacturers of electric two-wheelers.

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