The Ministry of Heavy Industries (MHI) is investigating Hero Electric and Okinawa for allegedly violating norms by using imported components in their electric two-wheelers, which is a clear violation of PMP guidelines. The two-wheeler companies may have to pay back the Rs 150-200 crore subsidy they received as part of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. They may also be barred from receiving any future payments from the scheme.
According to reports, 13 companies are under the scanner, including Lohia Auto, Benling, Okaya EV, Victory Electric Vehicles, Kinetic Green Energy, Avon Cycles and Greaves Electric Mobility. After it received complaints against these firms for violations of the localisation criteria and the Phased Manufacturing Program, the MHI asked vehicle testing agencies to probe and verify the charges.
The probe report against the remaining EV firms will likely be received by the MHI in two weeks. A CNBC report claimed that the government is mulling several options, with recovery of wrongfully claimed subsidies and registration of a first information report (FIR) among them. The ministry will take a final call once the probe is over.
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The Society for Manufacturers of Electric Vehicles has claimed that funds amounting to Rs 1500 crore have been held up for EV companies for almost 15 months. The Centre had put subsidies under the FAME-II scheme on hold pending its inquiry.
The ministry had also received complaints against TVS, Ather Energy, Ola Electric and Hero MotoCorp. The companies were accused of charging customers beyond the FAME cap of Rs 15 lakh and selling chargers separately. After show-cause notices were issued to the EV makers, Ather and Ola have decided to provide chargers to customers for free.
However, Hero Electric denies having received any letter from the Department of Heavy Industries regarding the possibility of returning the subsidy. The company is ready to respond when and if they receive it, hoping for a resolution to the issue. Hero Electric has followed the entire CMVR and certification process for manufacturing and selling its entire range of E bikes for the last 15 years. The company has been offering value-for-money reliable mobility solutions with sensibly priced products and efficient after-sales services. The issue pertains to the 2 to 3 years beginning in 2019 that had no supply chain and also suffered a Covid blackout period. Hero Electric is confident that a practical solution is round the corner.
Talking about the FAME-II scheme, it provided a subsidy to electric two, three and four-wheeler manufacturers to ply their transport in public. The total outlay of the scheme was Rs 10,000 crore. Till date, Rs 3,701 crore has been utilised. A sum of Rs 5,172 crore has been allocated for FY24.
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