Government mulls legal action against 2-wheeler EV makers over FAME 2 violation

The government is exploring legal options against electric two-wheeler companies for not complying with the FAME II scheme norms, PTI quoted a senior government official as saying. The Centre has sought Rs 469 crore from seven electric two-wheeler makers for claiming incentives but not adhering to the FAME II (Faster Adoption and Manufacturing of Electric Vehicles) scheme norms.

The Centre is seeking a refund of incentives from Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility and Lohia Auto, PTI reported. An investigation by the Ministry of Heavy Industries has revealed that these companies have availed fiscal incentives under the scheme by violating the norms.

The FAME II scheme's regulations permitted incentives for producing EVs using made-in-India components. However, the investigation revealed that these seven companies purportedly utilised 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 that boost domestic manufacturing of  electric vehicles. 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. 

To encourage the adoption of electric and hybrid vehicles in the country, in 2019, a Rs 10,000 crore programme was introduced under the FAME-II scheme. 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.