Policy accountability sharpens as subsidy misuse penalties reshape India’s EV landscape, affecting smaller players the hardest.
A regulatory crackdown on violations of the FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) programme, which supports making and using electric vehicles, has greatly hurt India’s smaller electric vehicle makers. This has caused a big drop in sales and made some leave the market.
Companies such as Okinawa Autotech, Hero Electric, Ampere Vehicles, Benling India, and AMO Mobility have experienced significant declines in sales during 2024 and 2025, following investigations into their non-compliance with domestic value addition requirements under the FAME-II scheme.
Okinawa’s annual sales experienced a significant decline, plummeting from over 31,000 units in 2023 to fewer than 5000 units in 2024. Similarly, Hero Electric reported a drastic reduction in registrations, falling from nearly 30,000 units in 2023 to merely 382 units in the first half of 2025. Once regarded as leading brands in the market, both companies now confront operational challenges and legal obstacles. Additionally, Hero Electric has initiated insolvency proceedings.
The Ministry of Heavy Industries has pinpointed 13 manufacturers for investigation, with six of them discovered to violate regulations. These companies have been directed to repay more than ₹4.69 billion in incorrectly claimed subsidies. While some, such as Greaves Electric and Revolt, have remitted parts of the owed amount, others are disputing the findings..
The crackdown has forced affected brands to raise vehicle prices, leading to a collapse in consumer demand and eroding market presence. Meanwhile, larger players such as Ola Electric, Ather Energy, TVS, and Bajaj, who complied with localisation norms, have gained ground.
The government is currently drafting the FAME-III policy framework, expected to carry forward subsidy support with stricter accountability.
