Government Could Seek To Recover FAME II Subsidies From Hero Electric, Okinawa: Report

Hero Electric and Okinawa Autotech could be required to pay back the Central Government the subsidies the two companies received under the FAME II scheme. As per reports, an investigation ordered by the Ministry of Heavy Industries (MHI) has allegedly found that both companies used several imported components in their scooters violating the norms laid down to avail of benefits under the FAME scheme. The two companies could also be pushed out of the purview of the scheme altogether barring any future subsidies on their e-scooters.

Also read: Hero Electrics’ Sales Reach 1 Lakh Units For The Second Consecutive Year In FY2023
 

Hero Electric and Okinawa have allegedly not met the localisation requirements under the FAME II scheme

The investigation into the two brands was part of a wider probe against several electric vehicle and component manufacturers by the MHI for violating the requirements of the FAME II scheme while still claiming subsidies. Allegations against multiple electric vehicle manufacturers have broadly been based on the matter of pricing and the use of imported components.

Also read: Hero Electric Targets Production Increase Of Upto 8 Lakh Units Annually
 

In cases related to the pricing of scooters, some brands reportedly asked customers to pay separately for electric chargers and software outside of the cost of the scooter. This lead to the breaching of the Rs 1.5 lakh price cap in place for the subsidies.

Both manufacturers were part of a list of 13 companies under investigation for not meeting FAME II requirements to claim subsidies

Okinawa and Hero Electric have meanwhile allegedly not complied with the Phased Manufacturing Programme (PMP) that requires manufacturers to start sourcing components locally. As per the reports, other EV manufacturers such as Okaya and Kinetic Green which were also investigated did not violate the PMP rules.

Also read: Okinawa Autotech Updates Praise Range To Offer Improved Ergonomics
 

carandbike has reached out to both manufacturers with a response awaited at the time of this article being published.

A total of 13 companies have been under investigation of violating the norms laid out to receive subsidies under the FAME II scheme with many still under investigation. As per the Society of Manufacturers of Electric Vehicles over Rs 1,400 crore worth of subsidies under the FAME II scheme has yet to be released by the Central Government since subsidies were halted after allegations of misconduct arose.

Source 1, Source 2