According to a government official, the Centre has demanded Rs 469 crore from seven manufacturers of electric two-wheelers, including Hero Electric and Okinawa, for claiming subsidies while failing to adhere to the Faster Adoption and Manufacturing of Electric Vehicles FAME II scheme criteria.
The official stated that if the FAME II incentive money was not returned to the government, they would be removed from the programme in the following 7 to 10 days and would no longer be able to take part in it. According to a heavy industries ministry inquiry, these businesses took advantage of the program’s tax benefits by breaking the rules.
FAME II incentives’ refunds
According to the FAME II scheme’s guidelines, incentives were authorised to be used to produce electric vehicles using parts created in India, but the examination revealed that these seven enterprises had really used imported parts.
“Six corporations were cleared during our investigations, while seven companies broke the rules. We are hence asking for Rs 469 crore. The official stated that they would have to pay the money back to the government.
Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto are the seven businesses. After receiving anonymous letters stating that multiple EV manufacturers were claiming subsidies without abiding by the Phased Manufacturing Plan(PMP) guidelines, which are meant to increase local manufacturing of these EVs, the ministry launched the investigation.
Following that, the ministry postponed the allocation of subsidies for the previous fiscal year. According to the official, two of the seven have informed the government that they will be returning the incentives amount plus interest.
The source further stressed that none of these participants have been prevented by the government from producing vehicles, but “they will no longer receive any incentives under the scheme.” A Hero Electric spokeswoman responded to inquiries by saying, “The warning relates to a time when there was no justification for our non-compliance. Hero Electric has no use for it.
According to a Greaves Electric Mobility (GEM) representative, the business was among the first to fervently embrace and carry out the government’s localization strategy. “We have been working with the government to gain a better understanding of their concern and in relation to the same, we have filed a detailed representation,” the official continued.
According to the CEO of Lohia Auto, Ayush Lohia, “We want to emphatically state that we have not received any data or notice from the government department or relevant authority regarding the reversal of subsidies.” He continued, “We are unaware of the source of data that alleges Lohia Auto Industries’ involvement in this matter.” Revolt Motors and Okinawa Autotech declined to comment.
A Rs 10,000 crore plan under the FAME II scheme was announced in 2019 to promote electric and hybrid vehicles. It is a more comprehensive version of the current FAME India I (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, which was introduced on April 1, 2015, with a total investment of Rs 895 crore.
Incentives are mostly applicable to vehicles used for registered business purposes or for public transportation in the three-wheeler and four-wheeler sectors. Private automobiles are the main focus of the two-wheeler market.
