Government considers legal action against electric 2-wheeler manufacturers for FAME II non-compliance: PTI

The government is exploring legal options against electric two-wheeler companies for not complying with the FAME II scheme norms, according to a senior government official, PTI reported.

The centre has sought Rs 469 crore from seven electric two-wheeler makers, for claiming incentives but not adhering with the FAME II (Faster Adoption and Manufacturing of Electric Vehicles) Scheme norms.

The government is seeking a refund of incentives from Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility and Lohia Auto, PTI reported.

According to the official, notices have been sent to the companies, and so far, only Revolt Motors has offered to refund the amount. We have sent them notices. So far, only Revolt has offered to pay… others have not responded, he stated.

The official further stated that the deadline is almost over and that next week, the government will be making some decisions.

"We are examining legal options," he said when asked about action being considered by the government, he said.

An investigation by the heavy industries ministry has revealed that these companies have availed fiscal incentives under the scheme by violating the norms.

The scheme's regulations permitted incentives for producing electric vehicles using made made-in-India components. However, the investigation revealed that these seven companies purportedly utilized imported components, as indicated in the report.

The ministry conducted the investigation after receiving anonymous emails alleging that several EV makers were claiming subsidies without complying with the Phased Manufacturing Plan (PMP) rules to boost domestic manufacturing of these electric vehicles.

The ministry initiated the investigation after receiving anonymous emails alleging that multiple EV manufacturers were obtaining subsidies without adhering to the Phased Manufacturing Plan (PMP) rules aimed at promoting domestic electric vehicle manufacturing.

Subsequently, the ministry postponed the disbursement of subsidies during the previous fiscal year.

The seven electric two-wheeler manufacturers have requested the government to explore the option of having customers repay any excessive rebates they received when purchasing the vehicles, as per the report

The Society of Manufacturers of Electric Vehicles (SMEV) stated that these companies have incurred a combined loss exceeding Rs 9,000 crore due to unpaid dues and a decline in market share after their subsidies were discontinued last year.

In 2019, a Rs 10,000 crore program was introduced under the FAME-II scheme to encourage electric and hybrid vehicles.

It is the expanded version of the FAME scheme, launched on April 1, 2015, with a total outlay of Rs 895 crore.

In the three-wheeler and four-wheeler segments, incentives primarily apply to vehicles utilised for public transport or registered commercial purposes, while in the two-wheeler segment, the emphasis is on private vehicles.