Business Standard

Govt tells Ola, Hero Moto, TVS, Ather to pay customers Rs 278 cr by Nov

Move underscores Centre's resolve to ensure compliance with subsidy norms and protect interests of consumers

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Nitin Kumar New Delhi

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In the middle of mounting complaints from consumers regarding non-receipt of reimbursement for off-board chargers, the Centre has taken decisive action against four defaulting original equipment manufacturers (OEMs): Ola Electric, Ather Energy, TVS Motor Company, and Hero MotoCorp (under the Vida electric scooter brand).

These companies are being ordered to pay a combined total of approximately Rs 278 crore to around 200,000 customers by the end of November.

“Official notices are being sent to defaulter companies. We are asking them to return the money by the end of November or face punitive action,” a senior government official told Business Standard.

This assertive move by the government comes on the heels of a discovery by the Ministry of Heavy Industries that a mere Rs 10 crore of the total Rs 288 crore owed had been disbursed by defaulting OEMs until August 15.

The stern ultimatum underscores the government’s resolve to ensure compliance with subsidy norms and protect the interests of consumers.

Should OEMs fail to meet the November deadline, the government is prepared to cease further disbursements of subsidies. Additionally, these manufacturers could face a ban from seeking incentives under the flagship electric vehicle promotion scheme, Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II), for the remaining duration of the initiative.

The FAME-II programme is scheduled to conclude in March 2024.

The initial report of the default within the scheme was first reported by Business Standard on February 7, prompting intensified scrutiny of the matter. While starting the investigation into the default, the ministry also halted their subsidies in February.

In April, all four defaulter OEMs accepted their wrongdoing and pledged to reimburse consumers for the cost of off-board chargers that they had paid for. They also included the charger costs in the ex-factory price.

In response to this development, the government made the decision to release the halted subsidy of approximately Rs 800 crore from the suspended pool of around Rs 1,110 crore.

The remaining sum of approximately Rs 300 crore was to be released to the defaulting companies once they provided the necessary details of the reimbursement.

In the four months since the defaulter OEMs committed to reimbursing customers, government data reveals that Ola Electric has only refunded Rs 4.25 crore of its Rs 130 crore refund dues, while Ather Energy has returned Rs 3.97 crore of its Rs 140 crore due to customers. Besides customer reimbursements, Ather Energy also owes Rs 17 crore to the government for software upgrades.

TVS Motor Company has disbursed Rs 65 lakh of its Rs 15 crore due, and Hero MotoCorp has refunded Rs 1.64 crore of its dues of Rs 2 crore.

While these companies have attributed the sluggish pace of refunds to the lack of customer bank account details, officials have downplayed this explanation. They assert that information about buyers and their contact numbers is available, and refunds can be expedited accordingly.

“Customer details are a must to get FAME claims. With this deadline, we are making sure customers get what is due to them,” emphasised another official.

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First Published: Aug 22 2023 | 5:03 PM IST

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