Nearly every second electric two-wheeler sold under the government's electric vehicle promotion scheme was based on false localisation claims, according to a report in The Economic Times. This has led to the Centre slashing its official sales tally.
The number of FAME-II (Faster Adoption and Manufacturing of Electric (and hybrid) vehicles in India phase-II )scheme beneficiary two-wheelers was cut from some 989,000 to 564,000 by the Ministry of Heavy Industries.
The FAME-II scheme envisioned providing subsidies to one million electric two-wheelers by 2024. An investigation by the Automotive Research Association of India (ARAI) found several firms depending on imports for key parts such as electric motors, controllers, and onboard chargers, the report quoted sources as saying. These firms gave false information on the locally sourced content of their vehicles, the sources said.
The FAME-II scheme, which gives subsidies to electric vehicle manufacturers, requires companies to adhere to a phased manufacturing plan (PMP) that prescribes a gradual increase in the local sourcing of parts. This is to ensure that taxpayer funds are used to promote local manufacturing and not to subsidise Chinese imports.
Greaves Electric Mobility, the electric vehicle (EV) arm of listed company Greaves Cotton, is one of the firms that has reportedly not been following the PMP guidelines. The company's stock fell 10.3 per cent on the BSE on Monday to Rs 133.1 following reports that the government has sent the company a notice to recover the money paid as subsidies.
“We are working with the government to better understand any alleged violations and resolve any compliance concerns in this rapidly evolving industry,” a company spokesperson said.
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The Centre held back subsidies amounting to Rs 1,400 crore for over 400,000 electric two-wheelers sold under the scheme since April last year, but continued adding these units to its official sales count pending investigation. Now, it has cut these units from the sales tally.
This took place after a lobby, which represents the EV industry wrote to the parliamentary standing committee that the Centre was attempting to "cover up” the shortfall in reaching its targets by including the units for which the subsidies were withheld in its final tally, the report said.