Govt plans to recover Rs469 Cr from Okinawa, Hero Electric and other EV players under FAME-II fiasco

The union government has ordered seven

two-wheeler EV

According to sources cited by The Hindu Businessline, the Centre has ordered significant domestic companies like Hero Electric, Okinawa, Ampere, and Revolt, among others, to repay the subsidies.

Citing a government official the report stated, if the money is not refunded, the offending firms will be removed from the programme in the following seven to ten days, and they won't be permitted to take part in the programme again.  As per the research, Hero Electric would be required to pay the largest amount—INR 133.48 Cr—while Ampere would be the second-highest—INR 124.91 Cr. Okinawa is responsible for reimbursing subsidies of INR 116.85 Cr. 

The crackdown follows a Ministry of Heavy Industries (MHI) inquiry that showed the seven EV producers took advantage of "fiscal incentives under the scheme by violating the norms," according to MHI, which is the nodal organisation for the scheme.

According to the Scheme's regulations, incentives were permitted to be used to produce EVs using parts produced in India. However, it was discovered during the inquiry that these seven enterprises had utilised imported parts, an MHI official informed the magazine. 

The Prime Minister's Office (PMO) was encouraged by Hero Electric, Benling Motors, and Ammo Mobility the previous day to pressure the MHI to settle the issue since the fines might force EV OEMs to declare bankruptcy.

The FAME-II programme, introduced in 2019 with a total investment of INR 10,000 Cr, sought to increase EV adoption in the nation by providing subsidies for 55,000

electric four-wheel

The government discovered, however, that several EV two-wheeler producers submitted claims for subsidies without following the laws requiring localization. 

After then, the government stopped giving several of the players subsidies. Since then, EV industry organisations and individual individuals have written to the government to complain about its actions, claiming they are harming the nation's EV goals. The administration, though, has persisted in its position. After wrongdoings were discovered, the MHI also reduced incentives under the FAME-II plan from 40% to 15% of the ex-factory price of an EV two-wheeler. The demand incentive was also lowered from INR 15,000 per kWh to INR 10,000 per kWh.