Amid allegations of subsidy misuse, a consortium of seven electric two-wheeler manufacturers has requested the government to consider asking customers to repay any excess incentives they received while purchasing the vehicles. In a letter to Minister of Heavy Industries, M N Pandey, the Society of Manufacturers of Electric Vehicles (SMEV) proposed that customers who availed such subsidies could be asked to return them to the affected Original Equipment Manufacturers (OEMs).
Government Seeks INR 469 Crore Refund from Electric Two-Wheeler Makers for FAME II Scheme Non-Compliance
The government is seeking a refund of INR 469 crore from seven electric two-wheeler makers, including Hero Electric and Okinawa, for availing incentives without complying with the FAME II scheme norms. In response, SMEV’s Chief Evangelist, Sanjay Kaul, emphasized the need for customers who received subsidies beyond the correct price to return the excess amounts, even if the correction is done retrospectively. He suggested that OEMs could then return these subsidies to the Ministry of Heavy Industries (MHI), effectively nullifying the FAME subsidy obligations.
Kaul proposed that OEMs should meet with MHI officials to work out the details of this proposal. He also mentioned the possibility of a public notice or sharing customer data to request the return of excess rebates received as subsidies.
Ministry of Heavy Industries Investigates Electric Vehicle Manufacturers for Alleged Misuse of Incentives under FAME II Scheme
The investigation by the Ministry of Heavy Industries revealed that these companies allegedly used imported components instead of Made in India components to avail fiscal incentives under the FAME II scheme. The scheme, aimed at promoting domestic manufacturing of electric vehicles, provides incentives for using Indian components in electric vehicles. In light of the allegations, the ministry is seeking the return of subsidies provided last fiscal year to boost electric and hybrid vehicles under the FAME II scheme.
