FAME II Scheme Non-Compliance: Seven Electric Two-Wheeler Makers Asked To Return Rs 469 Crore To Government

The Centre has reportedly sought Rs 469 crore from seven electric two-wheeler manufacturers, including Hero Electric and Okinawa, for claiming incentives without complying with the norms of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme.

If the amount is not refunded to the government, these companies will be de-registered from the scheme within the next 7-10 days.

Additionally, the government will prohibit them from participating in the scheme, a government official was quoted as saying by The Indian Express.

An investigation conducted by the heavy industries ministry has revealed that these companies have availed fiscal incentives under the scheme by violating the norms.

The scheme's rules state that incentives can only be claimed for electric vehicles manufactured using components made in India. However, the investigation found that these seven firms have used imported components.

According to an official, out of the companies investigated, six were found to be in compliance with the norms, while seven companies have been found to have violated them.

As a result, the government is seeking Rs 469 crore from these companies, which they will have to return, the official added.

The seven companies that have violated the norms are Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto.

Following anonymous emails alleging non-compliance with the Phased Manufacturing Plan (PMP) rules, the ministry conducted an investigation into several electric vehicle (EV) makers. The PMP rules are aimed at promoting domestic manufacturing of EVs.

As a consequence of the investigation, the distribution of subsidies was delayed by the ministry in the last financial year.

Two out of the seven companies have informed the ministry that they will return the incentives amount with interest.

The government has not prohibited any of these players from manufacturing vehicles, but they will no longer receive any incentives under the scheme.

A Hero Electric spokesperson stated that the notice is irrelevant to the company as it pertains to a period in which there is no cause for its non-compliance.

Greaves Electric Mobility (GEM) mentioned that they were one of the first companies to support and fulfill the government's localization vision. "We are working with the government to better understand their concern and in relation to the same we have filed a detailed representation,” the spokesperson added.

Lohia Auto CEO Ayush Lohia has clarified that the company has not received any information or notice from the government or any concerned authority regarding the reversal of subsidies.

He also stated that they are unaware of the source of information that alleges Lohia Auto Industries' involvement in this matter.

In 2019, a Rs 10,000-crore programme called FAME-II was announced to promote electric and hybrid vehicles. This programme is an expanded version of the existing scheme FAME India I, which was launched on 1 April 2015 with a total budget of Rs 895 crore.

In the three-wheeler and four-wheeler segments, incentives for electric and hybrid vehicles are mainly applicable to those used for public transport or registered commercial purposes. On the other hand, in the two-wheeler segment, the focus is primarily on private vehicles.