Centre to recover Rs 469 cr from 7 electric 2W makers for non compliance with FAME II

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

The Centre has sought Rs 469 crore from seven electric two-wheeler makers, including Hero Electric and Okinawa for claiming incentives while not complying with the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme norms, a government official said.

The official said that in case of non-refund of the amount to the government, they will be de-registered from the scheme in the next 7-10 days and the government would not allow them to participate in the scheme. An investigation by the heavy industries ministry has revealed that these companies have availed fiscal incentives under the scheme by violating the norms.

As per the rules of the scheme, incentives were allowed to make electric vehicles by using made-in-India components, but in the investigation, it was found that these seven firms have used imported components. "In our investigations, six companies have been found clean, but seven companies have violated the norms. So we are seeking Rs 469 crore. They will have to return the amount to the government," the official said. The seven companies are Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto.

The ministry conducted the investigation after receiving anonymous emails alleging that several EV makers were claiming subsidies without complying with the Phased Manufacturing Plan (PMP) rules, which are intended to boost domestic manufacturing of these electric vehicles. After that, the ministry delayed the distribution of subsidies last financial year. Out of the seven, the official said, two have communicated to the ministry that they would return the amount of the incentive with interest.

The official also clarified that the government has not stopped any of these players from making vehicles, but now they will not get any incentive under the scheme. When contacted a Hero Electric spokesperson said, "The notice pertains to a period in which there is no cause for our non-compliance. It is not relevant for Hero Electric.” A Greaves Electric Mobility (GEM) spokesperson said the company was one of the first companies to enthusiastically support and deliver on the government's localisation 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 said, "We want to emphatically state that we have not received any information or notice from the government department or concerned authority regarding the reversal of subsidies. We are unaware of the source of information that alleges Lohia Auto Industries’ involvement in this matter.”

Okinawa Autotech and Revolt Motors declined to comment. To promote electric and hybrid vehicles, a Rs 10,000-crore programme under the FAME-II scheme was announced in 2019. It is the expanded version of the present scheme FAME India I (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles, which was launched on April 1, 2015, with a total outlay of Rs 895 crore. In three-wheeler and four-wheeler segments, incentives are applicable mainly to vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus is on private vehicles.