FAME-II shakeout: Consolidation hits E-two-wheeler market as sales dive

The steep fall in registrations follows the Ministry of Heavy Industries’ decision to suspend subsidy payments after multiple companies were found violating Phased Manufacturing Programme (PMP) localisation requirements under FAME-II

Electric two-wheeler companies that were penalised for breaching norms under the FAME-II subsidy scheme have experienced a steep fall in sales, with many smaller firms nearly disappearing from the market, an Economic Times report said on Monday.  The government's enforcement drive has caused a sharp consolidation, benefiting only a few surviving players, the report added.

Okinawa Autotech, headquartered in Gurugram, saw its annual sales drop dramatically—from 31,618 units in 2023 to just 4,855 in 2024. For the first half of 2025, only 1,422 vehicles were sold, according to figures from the government’s Vahan portal.

Ampere Vehicles, owned by Greaves Electric Mobility, also faced declining numbers. Combined registrations under both Ampere and Greaves brands dropped to 26,963 units in 2025 so far, compared to 36,148 in 2024 and 66,958 the year before.

Meanwhile, smaller players such as AMO Mobility and Benling India have virtually exited the market. Their 2025 sales so far stand at just 25 and 95 units, respectively. Launched in 2019, the FAME-II scheme was designed to promote local manufacturing by mandating that a certain percentage of components be sourced domestically to qualify for government subsidies. However, in late 2022 and early 2023, the government launched investigations after receiving complaints of non-adherence.

“The market has been a bit slow but is likely to improve… We are finding our own ways to sell our vehicles,” said Sushant Kumar, founder of AMO Mobility, without elaborating.

Hero Electric, once a top player in the segment, is now in insolvency proceedings. A resolution professional has invited bids to acquire the company. Hero’s registrations fell from 29,965 units in 2023 to 2,916 in 2024, and only 382 units have been recorded so far this year.

“This is a case of regulatory action that essentially took the wind out of these companies,” said VG Ramakrishnan, managing partner at Avanteum Advisors LLP. “They benefited from the subsidies without following the rules and ultimately paid the price. They had a business model but failed to invest in localisation or comply with government directives, yet continued to claim incentives.”

The steep fall in registrations follows the Ministry of Heavy Industries’ decision to suspend subsidy payments after multiple companies were found violating Phased Manufacturing Programme (PMP) localisation requirements under FAME-II.

A total of 13 electric two-wheeler companies were under investigation. Of these, six—Hero Electric, Okinawa Autotech, Benling India, AMO Mobility, Greaves Electric Mobility, and Revolt Motors—were found to be non-compliant. After comprehensive audits and scrutiny of vendor documents, the government ordered these firms to return the incentives, with the total recovery pegged at ₹469 crore.

Revolt, Greaves, and AMO Mobility have collectively refunded ₹170 crore to the government. In contrast, Hero Electric, Okinawa Autotech, and Benling India have challenged the directive and taken legal recourse.