The Society for Manufacturers of Electric Vehicles (SMEV) has raised a petition to the parliamentary standing committee on industry, energy, and estimates over what it deems to be a misleading claim by the ministry of heavy industries. According to the petition, the ministry claimed to have met its target of subsidizing one million electric two-wheelers by April 2023, but SMEV believes this claim to be erroneous. The ministry is said to have included the sale of electric vehicles that were not subsidized under the FAME II scheme, leading to an overestimation of the actual number of electric vehicles that received subsidies.
From April 2022, the government had started blocking FAME II subsidies to original equipment manufacturers (OEMs) in the electric vehicle sector for flouting the stipulations of localization and price caps. Auditors consulting with SMEV discovered that the figures stated by the ministry on FAME II mandated targets included sales of those electric vehicles that were not funded under the scheme.
Between April 2019 and 2023, the total number of e-two-wheelers sold under the FAME II scheme is listed at 9.6 lakh. However, 4.5 lakh vehicles out of these have not been reimbursed the subsidy component until now. Only around 5 lakh e-two-wheelers have been funded under the FAME II scheme, which is only half of the target.
Sohinder Gill, CEO of Hero Electric, has stated that the FAME II target of achieving one million EV sales in four years is negligible, and the ministry’s claims are fraudulent. He further added that around 40-45% of the targeted sales are not supported by the ministry, and the OEMs themselves are paying out the subsidies to their customers. The ministry has stopped reimbursing the subsidy, which raises the question of how the ministry can count the sales of these EVs in its target.
SMEV suggests that until the unpaid subsidies are released, these EV sales should not accrue to the ministry’s target figures. Otherwise, the subsidies should be released if the figures have to hold. The petition raises concerns about the credibility of the ministry’s targets and calls for greater transparency in the process. The industry stakeholders feel that these discrepancies could impact the growth of the electric vehicle sector in the country and have appealed for the government’s intervention to resolve the issue.
