Govt to start random checks on EVs after recent lapses under FAME II scheme

The government is considering random checks on electric vehicles (EVs) after recent lapses under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) II scheme, according to government officials.
 

The checks will be conducted by the Automotive Research Association of India (ARAI). This follows the recent government action against two key players in the EV market — Hero Electric and Okinawa Autotech.
 

“The ARAI will select a vehicle at random from the market and test it to check if the manufacturer is following the guidelines. If there is any violation, the ministry (of heavy industry) will take the same action it took aainst localisation and ex-factory price defaulters,” a government official said.
 

The ARAI, established in 1966, is the leading automotive R&D organisation of the country set up by the automotive industry with the Government of India. It is an autonomous body affiliated to the Ministry of Heavy Industries.
 

The ministry sent recovery notices to Hero Electric and Okinawa Autotech over a supposed breach of localisation norms.

Both companies have been “deregistered” from the government’s subsidy scheme to promote electric vehicles.
 

The FAME scheme was introduced to facilitate India’s transition to EVs. While FAME II has been successful in encouraging the adoption of EVs, allegations relating to the misappropriation of funds by bypassing localisation and ex-factory price norms have dampened sentiment.
 

Currently, inspection is done on a yearly basis to reduce the compliance burden on companies and promote ease of doing business. The testing agencies — IARI and ICAT — do their inspection annually before issuing a certificate of FAME India Phase II eligibility fulfilment.
 

“Because of recent events we would have to start random checks,” a senior official said.
 

Under the FAME scheme, in order to be eligible for the subsidy, 50 per cent of the components in an EV should be domestically manufactured and sourced.
 

Based on a complaint that companies were not following localisation norms, the ministry halted the claims of a dozen original equipment manufacturers in September until the ongoing audit is completed.
 

Though the ministry in its report on the PMP guideline violation concluded that there had been rampant use of imported parts by Hero Electric and Okinawa, it gave a clean chit to Okaya EV and Kinetic Green.
 

According to the industry body — Society of Manufacturers of Electric Vehicles (SMEV) — claims worth Rs 1,200 crore have been withheld since September last year.
 

The government in February started investigating four electric two-wheeler companies —Ola Electric, Ather Energy, TVS, and Hero MotoCorp’s Vida — after an ex-factory violation. For electric two-wheelers, in order to be eligible for the subsidy, the price of the vehicle should be under Rs 1.5 lakh. But companies were depressing the ex-factory prices by selling chargers and software separately. Now more than a dozen companies are under the scanner for this.
 

After the ministry started investigation, all the four companies have agreed to comply with the government guidance and add the cost of the off-board charger as part of the ex-factory scooter price. The companies have also agreed to reimburse Rs 287 crore to customers.