Govt Exploring Legal Steps Against Electric 2-Wheeler Companies Over FAME II Norm Violations

The government had asked for a subsidy refund of Rs 469 crore from seven electric two-wheeler makers who did not comply with the FAME II scheme norms

The FAME-II scheme, aimed at promoting electric vehicles (EVs) in India, permitted companies to offer up to 40 per cent discounts on locally manufactured EVs and claim it as a government subsidy. 

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A senior government official has said that the government is exploring legal options against electric two-wheeler companies for not complying with the FAME II scheme norms, reported PTI. The FAME-II scheme, aimed at promoting electric vehicles (EVs) in India, permitted companies to offer up to 40 per cent discounts on locally manufactured EVs and claim it as a government subsidy. 

According to the PTI report on Wednesday, the government had asked for a subsidy refund of Rs 469 crore from seven electric two-wheeler makers who did not comply with the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme norms. The list includes Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto.

The report said that the government had sent notices to these companies, and so far, only Revolt Motors has offered to refund the amount, according to the official. 

"We have sent them notices. So far, only Revolt has offered to pay...others have not responded," the official said adding that the deadline is almost over, and next week, the government will be making some decisions.

"We are examining legal options," he further added as per the report.

An investigation by the heavy industries ministry has revealed that these companies have availed fiscal incentives under the scheme by violating the norms. The Ministry of Heavy Industries found that seven electric two-wheeler companies violated rules by using imported components instead of made-in-India ones to claim fiscal incentives for producing electric vehicles. Anonymous emails prompted the investigation, leading to a delay in subsidy distribution, the report noted. 

These companies have suffered a cumulative loss of over Rs 9,000 crore due to unpaid incentives and market losses, according to the Society of Manufacturers of Electric Vehicles (SMEV). They are now asking the government to consider having customers repay excess rebates. The incentives were part of the FAME-II scheme, which aimed to promote electric and hybrid vehicles with a Rs 10,000 crore budget.