Indian Government Considers Legal Action Against Electric Two-Wheeler Manufacturers Over FAME II Scheme Violations


A senior government official has revealed that the government is considering legal action against electric two-wheeler companies that have not complied with the FAME II scheme norms.

The Centre has demanded Rs 469 crore from seven electric two-wheeler manufacturers for claiming incentives while allegedly violating the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme regulations.

The companies facing refund demands include Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Amo Mobility, and Lohia Auto. While Revolt Motors has expressed willingness to refund the amount, the others have not responded yet.

The government is now exploring legal options as the deadline for compliance approaches. An investigation by the heavy industries ministry revealed that these companies used imported components instead of locally made ones to produce electric vehicles, contrary to the scheme’s rules. This discrepancy prompted the delay in subsidy distribution last fiscal year.

The seven electric two-wheeler manufacturers have proposed that the government consider asking customers to repay excess rebates they received on vehicle purchases. The companies collectively claim to have incurred losses of over Rs 9,000 crore due to unpaid dues and subsidy withdrawal.

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The FAME-II scheme, launched in 2019 with a budget of Rs 10,000 crore, aims to promote electric and hybrid vehicles. It is an expanded version of the original FAME scheme launched in 2015, focusing on private two-wheelers, public transport, and commercial vehicles.

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