Government Starts Reinstating Subsidies To Penalised EV Brands

The Government of India has started reinstating subsidies to EV companies who were previously penalised for violating localisation norms as part of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India scheme. The companies under this spectrum here include Revolt Motors and Greaves Electric Mobility (part of Greaves Cotton). Both have already applied for the subsidies as part of ₹500 crore-worth Electric Mobility Promotion Scheme after it was cleared off of their respective fines. 

Earlier, the Government of India had sent recovery notices totalling ₹469 crore to six EV manufacturers for flouting norms as part of the FAME-II subsidy. While Revolt and Greaves have together paid back to the government ₹170 crore in total, manufacturers like Hero Electric, Okinawa Autotech and others have approached the court contesting the government’s claim. 

(Also Read: Indian Government Unlikely to Extend FAME-II Beyond March 2024.)

While the entire auto industry is awaiting the launch of the third instalment of FAME, the Ministry of Heavy Industries introduced EMPS 2024 in March 2024 to subsidise 3.72 lakh electric two—and three-wheelers. Post the annual budget 2024, the Government enhanced this budget outlay to ₹778 crore to support 5.61 lakh vehicles. 

As per official estimates, the Government has already received claims worth ₹147.32 crore against 1.01 lakh EVs under EMPS for EV sales made from April 1 onwards. Companies who have applied for this subsidy including Hero MotoCorp, Bajaj, TVS, Ather, Ola, and Kinetic Green – have already received approval for the same. 

With the upcoming FAME-III subsidy, the Government of India is likely to continue with its push primarily in the two-wheeler and three-wheeler segment, with a special focus towards electrification of the commercial fleet. To learn more about the upcoming FAME-III, click the link here.