Centre demands subsidy refund; EV makers in turn ask customers
The Indian government has demanded a refund of Rs. 469 crore from seven EV makers for allegedly claiming incentives while not complying with the FAME 2 norms. Now, the Society of Manufacturers of Electric Vehicles (SMEV) has written a letter to the Union Ministry of Heavy Industries suggesting that the amount be taken from the customers who benefited from the subsidy.
Why does this story matter?
The electric two-wheeler market witnessed a massive rise in popularity in recent years. People have started opting for electric scooters for lower running costs over their ICE-powered rivals. Another reason behind rising demand was the introduction of the FAME 2 scheme, which benefitted both EV makers and customers. However, an investigation has revealed that some automakers have taken undue advantage of this incentive policy.
EV makers took undue benefits under FAME 2 scheme
Under the FAME 2 scheme, incentives were given to produce electric vehicles by using made-in-India components. However, during an investigation by the Ministry of Heavy Industries, it was revealed that seven EV makers used imported components in their products and availed subsidies for them. These electric two-wheeler manufacturers have been asked to refund the subsidies or face disqualification from future schemes.
Ensuring compliance boosts local industry
Customers who availed subsidies during the purchase of electric two-wheelers may have to return them to the manufacturer. This could impact the electric vehicle industry in India. The government is taking steps to ensure compliance with the FAME 2 scheme norms in the future. The move is expected to encourage manufacturers to use locally made components and boost the domestic electric vehicle industry.
