Errant EV Players Might Face More Trouble For Flouting FAME-II

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The government has planned to cut down subsidies to errant EV firms. Photo by-Freepik

The Ministry of Heavy Industries is now mulling stringent actions against alleged errant two-wheeler Electric Vehicle (EV) players in India for falsely claiming subsidies under the Faster Adoption of Manufacturing of Electric Vehicles (FAME)-II. The ministry is the nodal agency for disbursing FAME-II funds to EV players.

As per reports, the ministry has planned to consider excluding these errant companies from getting government subsidies in the coming days. It has meanwhile also planned to refrain from giving any government assistance for the vehicles it sold in the last several months. It was on account of their defiance of the provisions of indigenous manufacturing of EVs under the scheme.

Several of these two-wheeler EV companies in India have come under lens after they were accused of misleading the government under the FAME-II scheme to avail subsidies. It comes weeks after the ministry had ordered a reduction in support for electric two-wheeler companies, which came into effect from June 1 this year. 

Earlier, the ministry had sent recovery notices to several two-wheeler EVs like AMO Mobility, Okinawa Autotech, Hero Electric, Ampere, Lohia Auto, and Bengling India. It was said to be to the tune of Rs 500 crore. However, many of these companies are in talks with the government to discuss the issue to avoid any stringent measures against them. 

Earlier in the first week of May, the ministry had decided to return the due subsidies to EV players like Ola Electric, Ather, TVS and HeroCorp after they changed some of their ways of subsidy disbursement to the customers and other corrective measures.

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Under the FAME-II norms, the Original Equipment Manufacturers (OEMs) are bound to use local manufacturing products to boost the local manufacturing of EVs in India. However, after reports of misleading claims of subsidy usage were reported to the ministry, it has started taking stringent measures ranging from halting subsidies to deciding on other punitive actions. 

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Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India II) Scheme was launched with an outlay of Rs 10,000 crore to incentivize demand for Electric Vehicles (EVs) by providing upfront subsidies and creating EV charging infrastructure. 

The government had planned to support 1 million electric two-wheelers, 5 lakh electric three-wheelers, and 55,000 electric cars under FAME II through subsidies. Allocation of Rs 1000 crore was also made under FAME II for the provision of EV charging stations.