Heavy Industries Ministry to begin clawback of subsidies from Hero Electric & Okinawa

"With respect to Hero Electric and Okinawa, the report concludes that there has been rampant use of imported parts which is a clear violation of PMP guidelines. Parts which should have been manufactured in India have been imported", said an official.

CNBC-TV18 has learnt that vehicle testing agencies like ARAI and ICAT have done exhaustive checks on the sourcing of components, conducted plant audits and performed strip-down tests on vehicles. All these investigations were conducted in the presence of company officials and videographed, said a source.

A total of 13 EV companies including Hero Electric and Okinawa were under investigation by the Ministry of Heavy Industries. Other companies under probe are, Benling, Okaya EV, Jitendra New EV, Greaves Electric Mobility, Revolt Intellicorp Pvt, Kinetic Green Energy, Avon Cycles,  Lohia Auto, Thukral Electric & Victory Electric Vehicles.

Sources say probe reports have also been received in connection with Okaya EV and Kinetic Green Energy. As no violation of FAME norms was found, therefore, the government is likely to release the subsidies due to Okaya and Kinetic Green.

“We welcome the decision of the Ministry of Heavy Industries to expedite ongoing investigations into electric two-wheeler manufacturers and resume processing and disbursing subsidies for those found compliant and eligible. We are pleased to know that Okaya EV & another player have been found to be compliant, and we remain hopeful that more companies will be found compliant within the next two weeks," Anil Gupta, Founder, Okaya Group said.

According to officials, the probe report against the remaining nine EV players is likely to be received by the ministry within two weeks. The government has also been considering the registration of an FIR for misappropriation of subsidies and could take a call once the entire probe is over.

The government had also received complaints against Hero MotoCorp, Ather Energy, TVS and Ola Electric for selling chargers separately and charging customers more than the FAME cap of 1.5 lakhs. Sources said that after show cause notices were issued to these companies, Ather and Ola have decided to give chargers free of cost to customers.

The second phase of the Faster Adoption and Manufacturing of Electric Vehicle scheme with an outlay of Rs 10,000 crore was announced in 2019. To date, 3,701 crore has been utilised and Rs 5,172 crore has been allotted for FY24.

Sources say the government is not keen on extending the FAME scheme after it ends in March'24 but a final call will be taken later in the year. It remains to be seen whether the remaining Rs 1,127 crore if utilised will be used for EV promotion or diverted to other government schemes.