FAME II scheme: Hero Electric, Okinawa Scooters claim 'no violation'

Hero Electric and Okinawa Scooters, the two firms that allegedly didn’t comply with localisation norms to claim subsidy under the FAME II scheme, have told the Centre that they have not breached any guidelines, government sources said. The electric vehicle (EV) manufacturers submitted their representations after the Ministry of Heavy Industries (MHI) sent subsidy recovery notices to alleged defaulters of the FAME (faster adoption and manufacturing of hybrid and electric vehicles) scheme.

“We have asked the testing agencies to go through their documentation. As the defaulters have submitted their responses within the seven-day deadline, the ministry is doing due diligence before taking further actions,” government officials said.

The ministry had sent notices to Hero and Okinawa in April, instructing the alleged defaulters to repay subsidy claims within 21 days. The notice said that if any representation was not submitted to the ministry within seven days, “further action, according to law, will be taken”. Under the FAME scheme, in order to be eligible for the subsidy, 50 per cent of the components in the EV should be domestically manufactured and resourced.  “Though the OEMs (original equipment manufacturers) have submitted the same response that they did when the ministry started the investigation in September, we are verifying their claims as the matter is likely to go to courts,” a government official said.

Both EV manufacturers confirmed that they had submitted representations to the ministry.

An Okinawa spokesperson said the firm was actively engaged in ongoing dialogues and discussions with the ministry, and added: “Our intention is to resolve this matter amicably and in compliance with all regulations. As a responsible company, we value our relationship with the government and adhere to the guidelines set forth by the MHI. We are committed to working transparently and cooperatively to ensure a satisfactory resolution.”

“We are confident that through constructive dialogue, we will be able to resolve the issue at the earliest and continue our contribution to the growth of electric mobility in India,” the spokesperson added.

Hero Electric, on the other hand, said that their case was being settled in a manner similar to that of Ola, Ather, TVS, and other companies.

“Although we faced challenges common to all OEMs, the other brands were also dealing with under-invoicing irregularities. In contrast, Hero Electric only needs to resolve issues related to localisation delays, particularly during the 2019-2020 period,” said Sohinder Gill, chief executive officer, Hero Electric.

While highlighting the hurdles faced during the 2019-20 period, Gill said, “At that time, there was a negligible supply chain for high-quality powertrain and lithium batteries, and the Covid pandemic further disrupted the efforts of OEMs and vendors to develop local components.”