Customers who have bought electric two-wheelers may have to return the subsidy amount, as the Society of Manufacturers of Electric Vehicles (SMEV) has written a letter to the government to withdraw the subsidy received by the customers. It has been said that vehicle subsidy should also be recovered from the customers. In fact, recently a report came out, in which the central government has asked 7 companies making electric two-wheelers, including Hero Electric and Okinawa, to return Rs 469 crore. These companies were receiving incentives (subsidies) in violation of the FAME-II scheme’s regulations for promoting the production and acceptance of electric vehicles more quickly.

Action on these EV companies:

• हीरो इलेक्ट्रिक (Hero Electric)
• ओकिनावा ऑटोटेक (Okinawa Autotech)
• एम्पीयर ईवी (Ampere EV)
• रिवोल्ट मोटर्स (Revolt Motors)
• बेनलिंग इंडिया (Benling India)
• एमो मोबिलिटी (Amo Mobility)
• लोहिया ऑटो (Lohia Auto)

Companies demand from the government

In a letter to Heavy Industries Minister MN Pandey, SMEV said that the subsidy given to EV companies by the government has been cancelled, so customers to whom the companies have already given subsidy, asked them to return the money to these companies. Go Some EV companies were asked to refund the overcharging money from the customers. If the subsidy is applied retrospectively, then customers should be asked to return the money to the subsidized companies.

Investigations and Complaints

The Ministry was receiving complaints about persons disobeying the PMP’s standards. The ministry then delegated the investigation to companies that test vehicles, like ARAI and ICAT. These agencies conducted a detailed investigation on the sourcing of components of 13 EV companies. Additionally, the agencies performed factory checks and vehicle strip down examinations. All of these inquiries were videotaped with company executives present.

What the investigation found

According to the report, an official said that Hero Electric and Okinawa have used imported parts extensively, which is in violation of PMP guidelines. The parts which should have been manufactured in India have also been imported from outside.

Action taken by the government

The government asked these companies to return the subsidy amount along with interest and stopped the subsidy being given. In case of non-payment of amount, these companies will be de-registered from FAME-2 scheme in 7-10 days and will not be allowed to participate in the scheme. In the event of a subsidy grab, the government is also thinking of filing a FIR.  

Where the screw is stuck:

Some companies continued to give relief to the customers after the subsidy was stopped. He hoped that after the investigation it would be reinstated, but it did not happen. 13 companies under probe, 6 companies get clean chit Ministry’s probe includes Hero Electric and Okinawa besides 13 EV companies. The ministry official reportedly stated, “In our investigation, 6 companies have been found clean.” These companies have been given a clean chit by the government, but seven companies have violated the rules. We are requesting Rs 469 crore in response. He will have to return this amount to the government. The official said- 2 out of 7 EV companies have informed the ministry that they will return the subsidy amount with interest. The official further stated that while the government has not prevented any of these businesses from producing vehicles, they will no longer be eligible for subsidies under the program.  

What is FAME-2 scheme?

With the aim of promoting electric vehicles, the Central Government had started the Faster Adoption and Manufacturing of Electric Vehicle (FAME) scheme. Subsidies are provided under this to promote electric automobiles. Rs 800 crore was allocated under the FAME-1 scheme. 10 thousand crore rupees have been given in 2019 for Fame-2. A total of 3701 crores have already been used for this. Additionally, Rs 5172 crore has been allocated for the fiscal year (2024; FY24). It will be interesting to watch whether the government uses the remaining funds for EV marketing after this issue comes to light. Under the FAME rules, the ministry initially provided a subsidy of Rs 15,000 per kWh to companies on two-wheelers priced up to Rs 1.50 lakh. From June 1, 2023, it has been reduced to Rs 10,000 per kWh. The maximum subsidy cap of 40% of the ex-factory price has also been reduced to 15%. Also Read: Lokesh Kanagaraj   FAQ: Q1: Will I have to return the entire subsidy amount if I am unable to meet the requirements? A1: The extent of the subsidy amount that might need to be returned depends on the specific rules set by the government. In some cases, partial returns might be required if certain conditions are not met.   Q2: How will the government ensure that subsidies are not misused? A2: Governments implement checks and balances to monitor the usage of subsidies. This may include periodic audits, requiring specific documentation, and penalties for those found misusing the incentives.   Q3: What happens if I sell my EV before the minimum ownership period required by the subsidy program? A3: Selling your EV before the minimum ownership period might trigger the need to return a portion or the entire subsidy amount, depending on the program’s rules.