After subsidy claims were rejected for two electric vehicle (EV) manufacturers, HeroElectric and Okinawa, due to "alleged misappropriation" of funds provided under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, CNBC TV-18 reported on May 26 citing sources that the Union government is likely to take action against more EV companies.
According to the channel's report, the Ministry of Heavy Industries would recover subsidies from four EV manufacturers, including Benling, Ampere and Amo Mobility.
The government has told four additional EV companies to return subsidies that they incorrectly received and to explain why they should not be disqualified from the FAME scheme, according to the news channel's sources.
The investigation into FAME scheme irregularities was initiated by government testing agencies Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology (ICAT) after whistleblowers raised apprehensions, the news channel reported earlier.
It was reported that the probe against Hero Electric and Okinawa revealed that they allegedly claimed subsidies of Rs 250 crore for imported components, but declared the consignments as being made indigenously.
Other two-wheeler EV makers Okaya, Jitendra New EV, Greaves Electric Mobility, Revolt Intellicorp, Kinetic Green Energy, Avon Cycles, Lohia Auto, Thukral Electric & Victory Electric - are also reportedly under the radar.
Recently, the government reduced the 40 percent maximum incentive rate for electric two-wheelers to a cap of 15 percent and also lowered the demand incentive from Rs 15,000 per kWh to Rs 10,000 per Kwh.
The FAME India initiative, which started on April 1, 2019, for a three-year term and was later extended for an additional two years through March 31, 2024, is intended to hasten the adoption and production of electric and hybrid vehicles. The second phase of FAME was extended as the purchase incentive scheme failed to reach the sales target. The sales target for FAME II was set at 15.62 lakh EVs by March 2022, but only about half the targeted vehicles had been sold till February 2023. The outlay for FAME II was Rs 10,000 crore.
As per the architecture of FAME II, the purchase support was made available to buyers as a subsidy and this amount was to be refunded to OEMs by the government.