EV makers in India face legal trouble over outstanding dues
The Indian government is contemplating legal action against seven electric two-wheeler manufacturers, namely Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto. They are accused of violating the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme norms and are being asked to repay Rs. 469 crore in incentives received while disregarding the scheme's rules.
What is the FAME-II program?
In 2019, the Indian government launched FAME II, an extension of the original scheme called FAME, which started in 2015 with a budget of Rs. 895 crore. The program aims to support the growth of electric vehicles. For FAME II, the government allocated a larger budget of Rs. 10,000 crore. The first phase, FAME I, ran from 2015 to 2019, while FAME II began in 2019 and has been extended by two years till 31 March, 2024.
Investigation exposes imported components misuse
An investigation by the Ministry of Heavy Industries (MHI) found that these seven electric two-wheeler makers availed fiscal incentives under the FAME II scheme by using imported components instead of made-in-India components, as required by the scheme's rules. The ministry conducted the investigation after receiving anonymous emails alleging that several electric vehicle (EV) makers were claiming subsidies without complying with the Phased Manufacturing Plan (PMP) rules to boost domestic manufacturing of electric vehicles.
Notices sent, refunds demanded from EV manufacturers
The Indian government has sent notices to these seven electric two-wheeler makers seeking a refund of the incentives they claimed under the FAME II scheme. So far, only Revolt Motors has offered to refund the amount. The companies face potential legal action if they fail to comply with the government's demands. These companies collectively incurred significant losses of more than Rs. 9,000 crore due to unpaid dues and market setbacks following the suspension of their subsidies last year.
