Govt mulls legal action against electric two-wheeler companies for FAME II violations

The government is exploring legal options against electric two-wheeler companies for not complying with the FAME II scheme norms, according to a senior government official.

The Centre has sought Rs 469 crore from seven electric two-wheeler makers for claiming incentives while not complying with the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme norms.

The government is seeking a refund of incentives from Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto.

As per the official, notices have been sent to the companies, and so far, only Revolt Motors has offered to refund the amount.

"We have sent them notices. So far, only Revolt has offered to pay...others have not responded," the official said.

He noted that the deadline is almost over, and next week, the government will be making some decisions.

"We are examining legal options," he said when asked about action being considered by the government.

An investigation by the heavy industries ministry has revealed that these companies have availed fiscal incentives under the scheme by violating the norms.

As per the rules of the scheme, incentives were allowed to produce electric vehicles by using made-in-India components, but in the investigation, it was found that these seven firms allegedly used imported components.

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 to boost domestic manufacturing of these electric vehicles.

After that, the ministry delayed the distribution of subsidies last financial year.

The seven electric two-wheeler makers have urged the government to look at the possibility of asking customers to pay back excess rebates availed by them on the purchase of the vehicles.

The companies have suffered a cumulative loss of over Rs 9,000 crore on account of unpaid dues and loss of market after their subsidies were stopped last year, the Society of Manufacturers of Electric Vehicles (SMEV) has stated.

To promote electric and hybrid vehicles, a Rs 10,000 crore-programme under the FAME-II scheme was announced in 2019. It is the expanded version of the FAME scheme, launched on April 1, 2015, with a total outlay of Rs 895 crore.

In three-wheeler and four-wheeler segments, incentives are applicable mainly to vehicles used for public transport or registered commercial purposes. In the two-wheeler segment, the focus is on private vehicles.