The Indian government’s push for electric vehicles (EVs) has hit a rough patch. The Ministry of Heavy Industries, which oversees the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, has excluded several major electric two-wheeler (e2w) manufacturers from a new subsidy program. These exclusions come amidst allegations that some companies misused subsidies under the previous FAME II scheme.
FAME II and Allegations of Misappropriation
Launched in 2019, FAME II offered financial incentives to boost EV adoption in India. However, in 2022, the government accused 13 e2w manufacturers of misappropriating subsidies. The ministry claimed these companies violated program guidelines and requested refunds for the disbursed funds. Some companies, like Okinawa Autotech (asked to return ₹116 crore) and Greaves Electric Mobility (₹124 crore), challenged these demands in court.
Enter the Electric Mobility Promotion Scheme 2024 (EMPS 2024)
Following the conclusion of FAME II on March 31, 2024, the government introduced the Electric Mobility Promotion Scheme 2024 (EMPS 2024). This new scheme offers a subsidy of up to ₹10,000 per electric two-wheeler, aiming to make EVs more affordable for consumers.
Who’s Missing Out?
Significantly, several prominent e2w manufacturers named in the FAME II subsidy misappropriation allegations are not yet registered under EMPS 2024. This includes companies like Hero Electric, Okinawa Autotech, and Greaves Electric Mobility. While the exact reasons for their exclusion remain unclear, it likely stems from the ongoing dispute regarding FAME II funds.
Impact on the EV Industry
The exclusion of these manufacturers could have a ripple effect on the Indian EV industry. These companies are major players in the e2w segment, and their absence from the new subsidy scheme could dampen overall EV sales. Additionally, the controversy surrounding FAME II subsidies might create uncertainty among potential EV buyers.
The Road Ahead
The Indian government’s commitment to promoting EVs remains strong. The EMPS 2024 scheme highlights this continued push. However, resolving the FAME II dispute and ensuring transparency in subsidy disbursement will be crucial for fostering trust and accelerating EV adoption in India.
Further Considerations
This blog post primarily focuses on the e2w segment. It’s important to note that the FAME II controversy and EMPS 2024 also apply to electric three-wheelers and four-wheelers to some extent. Additionally, future developments in the ongoing legal battles surrounding FAME II subsidies could significantly impact the EV industry.