In an unusual move, Hero Electric, Benling, and Amo Mobility, a group of electric vehicle manufacturers, have approached the Ministry of Heavy Industries (MHI) with a proposal to seek approval to ask customers for a refund for products sold at a lower price.
The proposal is based on a precedent set by MHI in a case where four OEMs were accused of overcharging customers, and MHI ruled that they must refund the excess amounts to the customers.
Facing financial challenges due to losses and outstanding penalty dues to the government, these EV makers have collectively written to the Society of Electric Vehicle Manufacturers Association to recover money from customers as a means to sustain their operations.
The association expressed concerns that the significant penalties imposed by the government and the slowdown in sales over the past 18 months due to disrupted sales could lead to potential bankruptcy for the affected vehicle makers.
SMEV (Society of Electric Vehicle Manufacturers) proposed the idea after extensive discussions with EV manufacturers impacted by MHI’s decisions in the last 18 months. The OEMs have reluctantly accepted it as the best solution under the circumstances.
In their proposal, SMEV suggests that since the OEMs have already passed on subsidies to customers, which were later ruled by MHI as unpayable to the OEMs, they should be allowed to recover these subsidies from the customers and return them to MHI, effectively nullifying the account.
The letter stated that the department had previously imposed penalties on some OEMs for overcharging customers and asked them to return the excess amounts.
In a similar manner, the letter suggests that the OEMs can recover the monies demanded by MHI for non-compliance from the customers and return them to the department.
The vehicle makers are willing to share customer data with the department to identify those affected by the potential public announcement for refunds.
They also expressed openness to issuing a Public Notice asking customers to deposit back the excess subsidies they had received, under the department’s guidance.