FAME-II: Subsidies to Hero Electric, Okinawa halted for non-compliance

The central government has suspended incentive payments to Hero Electric and Okinawa for not complying with the requirement for the localisation of components. The incentives were being given under the Rs 10,000 crore FAME-II scheme, a report by Times of India (TOI) said on Friday.

"An audit by the Automotive Research Association of India (ARAI) is currently underway at four more EV companies besides Hero Electric and Okinawa... The scope of the audit at manufacturing facilities of EV two-wheeler manufacturers is to verify that the components used in their vehicles are largely locally sourced. This is an essential criterion to ensure that the vehicles sold by these companies are eligible to be subsidized by the centre...," a person aware of the matter told the Economic Times (ET).

The incentives under the scheme are given to several categories of vehicles using advanced batteries. It includes over a million two-wheeler electric vehicles (EVs). 

Centre has also asked Greaves Cotton’s Ampere, Rattanindia’s Revolt, Okaya and Jitendra EV to face an audit to be conducted by the Automotive Research Association of India (ARAI). 

The audits have reportedly been conducted in the first and the last week of September. 

"An audit was successfully conducted by the test agency officials at our Ranipet plant and we have been given a clean chit," a spokesperson of Greaves Cotton told TOI. 

Hero Electric and Okinawa are among the top players in the two-wheeler (EV) industry in India. They have combined sales of 17,000 per month. Ampere, Revolt, Okaya and Jitendra together sell another 10,000-11,000 units a month, the TOI report said.