The electric vehicle industry group Society of Manufacturers of Electric Vehicles (SMEV) appealed to a parliamentary committee to order the government to release a pending subsidy amounting to Rs 1,200 crore earmarked to help the sector hit by liquidity problems.
The SMEV stated in a petition sent to the Parliamentary Standing Committees on Industry and Estimates that EV adoption has slowed down because of the financial strains the industry is facing.
The industry group said that the EV sector has been bombarded by irritants meant to disrupt the momentum of FAME 2.
The report said that “now that the country has almost completed the supply chain, all that is holding it back is Rs 1,200 crore in subsidies which have been held back leading to a severe liquidity crisis for the industry.”
The petition stated that it was urgent for government officials and industry representatives to come together and resolve the issues to get India back on track to meeting its targets of electric mobility.
Mahendra Nath Pandey, Minister of Union Heavy Industries, informed the Parliament in December that the government was investigating 12 automakers over alleged misappropriation under the FAME scheme worth Rs 10,000 crore.
He had said that the complaints received by the government are mainly related to violations of Phased Manufacturing Programme Guidelines (PMP) under FAME India Scheme Phase-II.
To promote the adoption of hybrid/electric vehicles in India, the Ministry of Heavy Industries has implemented the Faster Adoption and Manufacturing of Electric Vehicles Phase II scheme (FAME India Phase II).
The Phase-II FAME India Scheme was implemented for a five-year period, starting 1 April 2019, with budgetary support totalling Rs 10,000 crore.
This phase focuses on electrifying public and shared transport through subsidies for 10 lakh electric two-wheelers (E2Ws), 5 lakh electric three-wheelers (E3Ws), 55,000 electric four-wheelers (E4Ws), as well as 7,090 electric buses.
SMEV stated that the reason for the delay was mischievous emails claiming non-adherence to policy norms in regard to localisation targets.
It said that the charge of misappropriation was misplaced, as OEMs have yet to receive subsidies despite having passed them on to their customers.
The SMEV stated that “FY23 for the industry was a challenging year. First, because of the repercussions from two years of disruptions in COVID, and second, due to the delay of 12 months for subsidies.”
SMEV said that the FAME 2 initiative has been a pioneering, path-breaking policy architecture which has opened up the EV market dramatically and has also prepared it to take off fully – as long as a few irritants can be resolved.
