Hero Electric, Okinawa among EV makers asked to refund FAME II incentives

Top electric two-wheeler manufacturers have been given a deadline to refund FAME II incentives. The Centre has asked these EV makers to refund incentives worth ₹469 crore. As many as seven electric two-wheeler makers, including Hero Electric and Okinawa Autotech, have been asked to refund incentives for not complying with the FAME II scheme norms. The EV makers have about 10 days to refund the amount or face disqualification from being eligible for the scheme in future.

Earlier, the Ministry of Heavy Industries had launched an investigation against 12 EV makers for alleged misappropriation of subsidies under the ₹10,000 crore FAME scheme. The investigation revealed these electric two-wheeler manufacturers took benefit of the scheme by violating its norms. Incentives under the FAME II scheme, which aims to promote electric vehicle sales in India, was meant for EV makers who use locally manufactured EV components.

Out of the 12 manufacturers probed, seven EV makers were found to have flouted the norm in the investigation. “In our investigations, six companies have been found clean, but seven companies have violated the norms. So we are seeking ₹469 crore. They will have to return the amount to the government," the official was quoted by news agency PTI.

Besides Hero Electric and Okinawa Autotech, the other EV makers who are under the scanner are Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto.

Reacting to the development, Hero Electric denied it will have an impact on the manufacturer. A Hero Electric spokesperson was quoted by PTI saying, “The notice pertains to a period in which there is no cause for our non-compliance. It is not relevant for Hero Electric." A Greaves Electric Mobility (GEM) spokesperson said, “We are working with the government to better understand their concern and in relation to the same we have filed a detailed representation." Lohia Auto CEO Ayush Lohia reacted by saying, “We want to emphatically state that we have not received any information or notice from the government department or concerned authority regarding the reversal of subsidies." Okinawa Autotech and Revolt Motors are among the EV makers who has not officially issued any statement on the matter yet.

The FAME-II subsidy scheme was launched back in 2019. It was aimed to support electrification of public and shared transportation through subsidies for 10 lakh electric two-wheelers, five lakh electric three-wheelers, 55,000 electric four-wheelers, passenger cars, and 7,090 electric buses. In May, the Centre approved proposal by the Ministry of Heavy Industries to reduce subsidy under the FAME II scheme on electric two-wheelers bought on or after June 1. The notification issued by the ministry says a customer will only get 15 per cent of the overall cost of the electric two-wheeler back as subsidy.