EV makers face legal action over wrongful FAME II incentive claims

An official was quoted as saying that the companies that claimed incentives wrongfully under FAME II would have to pay them back first

The government will take legal action against electric vehicle (EV) manufacturers who do not return incentives that they are alleged to have wrongfully claimed under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme, The Economic Times (ET) reported on Monday.

The Centre has allocated Rs 10,000 crore for the FAME phase-II scheme and the corpus and structure of the third leg of the scheme are still being finalised.

An official said that the companies that claimed incentives wrongfully under FAME II would have to pay them back first. Only then would the government consider releasing the stalled subsidies to them or allowing them to participate in the scheme.

After receiving anonymous emails alleging that several companies were claiming subsidies without complying with the Phased Manufacturing Plan (PMP) rules, which are intended to boost local production, the Ministry of Heavy Industries delayed the distribution of subsidies last fiscal year.

Officials told ET that  Rattan Enterprises-owned Revolt Intellicorp and Amo Mobility have agreed to return the amounts they claimed under the FAME II scheme. Citing non-disclosure agreements (NDAs), some companies have declined to furnish critical information related to their local supply base.

Also Read: EV two-wheeler sales dip 56% in June on FAME-II subsidy cut: FADA

Under FAME II norms, the information must be furnished when requested.

Amo Mobility told ET that they passed on the subsidy of Rs 11 crore to ensure mass adoption, despite receiving only Rs 85 lakh so far. They are looking forward to finding an amicable solution to the matter.

Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto, and Amo Mobility were the seven firms that were sent recovery notices totalling Rs 469 crore earlier this financial year for allegedly violating local sourcing norms.

Benling India has asked that the amount due be deducted from future payable subsidies. Hero Electric has declined to share documents about vendors citing restrictions under non-disclosure agreements (NDAs).