Indian government probe into EV industry uncovers subsidy misuse linked to imported components.
In an eye-opening development, the Centre is reclaiming Rs 469 crore from seven leading electric two-wheeler makers, including giants like Hero Electric and Okinawa. These companies have claimed benefits without adhering to the FAME II scheme’s standards, thereby violating domestic manufacturing norms. A failure to comply could lead to a severe blow — their de-registration from the scheme, blocking any future participation.
An intensive probe by the heavy industries ministry discovered that these companies exploited fiscal incentives, violating the scheme’s core rules. While the scheme promotes electric vehicles manufactured with Indian components, the implicated companies allegedly resorted to imported parts.
Out of the scrutinized companies, Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto stand out. As a repercussion, two from the list have indicated their willingness to refund the incentives with accrued interest.
A spokesperson for Hero Electric clarified, “The notice is tied to a phase where Hero Electric’s actions were compliant.” Furthermore, Lohia Auto CEO, Ayush Lohia, expressed that they had not yet received any official communication on the matter, questioning the information’s credibility. On the other hand, representatives from Okinawa Autotech and Revolt Motors opted to remain silent.
A colossal Rs 10,000-crore initiative, the FAME-II scheme, was unveiled in 2019 to augment the adoption of electric and hybrid vehicles. This was a successor to FAME India I, launched in April 2015, and it allocated a whopping Rs 895 crore to the cause. While incentives for three-wheelers and four-wheelers cater to public and commercial transport, two-wheelers primarily target private vehicles.
To conclude, the government’s move underscores the importance of trust and compliance in the booming EV industry. Only time will reveal the broader implications of this episode for the involved stakeholders and the industry at large.
