“These two companies have agreed to comply with the stricter localisation rules under EMPS,” a senior official told ET. It is expected that both companies will be getting approvals for subsidies on future sales, allowing them to price their electric two-wheelers more competitively.
The government had sent recovery notices totalling INR 469 crore to six electric vehicle (EV) sellers after it found that they were flouting FAME scheme rules. Revolt, Greaves and Amo have paid back around INR 170 crore to the government. Hero Electric, Okinawa Autotech, and Benling India contested these claims and approached courts.
ET reported in May this year that the centre may reinstate financial support to companies that have paid back any wrongly claimed FAME subsidies with penal interest. In a statement issued last month, Revolt Motors informed the exchanges that its vehicles will be eligible for a subsidy of up to INR 10,000 per unit under EMPS.
The Ministry of Heavy Industries announced EMPS in March 2024 with a INR 500 crore outlay for subsidizing 3.72 lakh electric two and three wheelers. The allocation and scheme targets were enhanced in July to now support 5.61 lakh EVs with a INR 778 crore allocation.
According to official estimates, claims of INR 147.32 crore have been raised against sale of 1.01 lakh EVs under the EMPS for sales made from April 1 onwards. Hero Motocorp, Bajaj, TVS, Ather, Ola, and Kinetic Green are among the EV makers who have already got approvals to sell vehicles and claim EMPS subsidy.
The government launched the first FAME scheme in 2015 with a budget of INR 895 crore. FAME II, an expanded iteration of the programme, was rolled out in 2019 with an outlay INR 10,000 crore. These schemes were aimed at supporting the sale of locally produced electric vehicles (EV).
Subsidy disbursals under the scheme were tied to a phased manufacturing programme (PMP) in line with a progressive increase in localisation levels over time. As per the government, companies did not adhere to the PMP, but continued seeking FAME subsidy, defeating the scheme’s intent.
FAME II was in force from 2019 to 2024. It was successful in supporting sales of nearly 1.4 million e-2W, 161,000 e-3W, and 20,556 electric four-wheelers. FAME II centred on a PMP which gradually increased the localisation content in EVs made in the country.
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