A consortium of seven electric two-wheeler manufacturers, including prominent names like Ola, Hero Electric, and Aether, has found itself embroiled in allegations of subsidy misuse. In response, the Society of Manufacturers of Electric Vehicles (SMEV) has proposed a unique solution to rectify the situation. SMEV has requested the government to consider asking customers who received excess incentives and discounts while purchasing electric two-wheelers to repay the extra amount.
The issue comes to light as the government seeks a refund of INR 469 crore from these electric two-wheeler makers for non-compliance with the norms of the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME II) scheme. The FAME II scheme aims to encourage domestic manufacturing of electric vehicles and offers incentives to manufacturers using Indian components in their products.
SMEV’s Chief Evangelist, Sanjay Kaul, emphasized the importance of customers returning any excess subsidies they received beyond the correct price of the vehicles, even if the correction is done retrospectively. This proposal could effectively nullify the subsidy obligations under the FAME II scheme for the affected Original Equipment Manufacturers (OEMs). The excess subsidies returned by customers could be reimbursed to the Ministry of Heavy Industries (MHI) by the OEMs.
To execute this proposal, Kaul suggested that OEMs should hold discussions with MHI officials to work out the details. This could involve issuing a public notice or sharing customer data to request the return of excess subsidies received as incentives.
The investigation by the Ministry of Heavy Industries revealed that the concerned electric two-wheeler companies allegedly used imported components instead of domestically manufactured ones to avail fiscal incentives under the FAME II scheme. The misuse of subsidies has raised concerns, and the government is keen on recovering the provided incentives to promote transparency and adherence to the scheme’s guidelines.
