Government asks EV companies to return FAME II benefits

Date: July 18, 2023

In a recent development, the central government has initiated action against electric vehicle (EV) companies that have failed to comply with the guidelines of the Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) scheme. The government has warned the companies to return the incentives and subsidies they received under FAME II or face legal repercussions.

FAME II was launched by the Indian government in April 2019 to promote the adoption of electric vehicles and develop the necessary charging infrastructure in the country. Under the scheme, eligible EV manufacturers and buyers were entitled to various benefits, including financial incentives and subsidies.

However, several EV companies have been accused of non-compliance with the FAME II scheme’s requirements. The government has conducted extensive audits and found discrepancies in the claims made by these companies, including inflated sales figures and non-adherence to manufacturing standards.

The Ministry of Heavy Industries postponed the disbursement of subsidies last fiscal year after receiving anonymous letters stating that some companies were claiming subsidies without following the Phased Manufacturing Plan (PMP) requirements, which are intended to stimulate local production.

Revolt Intellicorp and Amo Mobility, both owned by Rattan Enterprises, have agreed to restore the money claimed, according to officials familiar with the issue. Amo responded to inquiries by saying, “To ensure mass adoption, we have passed on the subsidy of INR 11 crore… despite receiving only INR 85 lakh so far.” “We look forward to settling this issue amicably and in a positive way.”

For allegedly breaking local sourcing rules, the government filed recovery warnings totaling INR 469 crore to seven companies earlier this fiscal year: Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto, and Amo Mobility.

The government has also emphasized the need for EV companies to strictly adhere to the guidelines and rules of the FAME II scheme. Regular audits and strict monitoring mechanisms will be put in place to prevent future violations and ensure that incentives reach the deserving beneficiaries.

All businesses who have received the all-clear following investigations by testing organizations Automotive Research Association, India, and International Centre for Automotive Technology are currently receiving subsidies from the ministry.

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