More EV makers lose subsidy as Centre's probe deepens

The government has suspended the subsidies of around a dozen more electric vehicle (EV) makers as investigations progress into alleged incentives misappropriation by some companies under New Delhi's flagship promotion scheme for green transport technology.

A majority of the companies that have seen their subsidies recently paused are engaged in manufacturing three-wheelers. These include Victory Electric Vehicles, Thukral Electric and Best Way Agencies, among others.

These companies did not respond to ET's queries.


The subsidies are part of the ₹10,000-crore programme called FAME 2 ( Faster Adoption and Manufacturing of Electric vehicles in India scheme Phase-2). The FAME-2 web site shows the status of subsidies for vehicles manufactured by these companies as "expired".

Reasons for suspending subsidies include non-compliance with a parts localisation plan upon which the scheme is incumbent, and using outdated battery technology unapproved for the scheme, said an official.

"We found that some of them had certified their vehicles with lithium-ion batteries but were selling vehicles with lead-acid batteries instead," this official said. Lead-acid is an old battery technology and vehicles equipped with such batteries are barred from availing subsidies under FAME-2 scheme.

To be sure, some of the instances where subsidies have expired include cases where there are extraneous delays in receiving compliance certification or the certified vehicle being discontinued by the manufacturer, as in the case of Atul Auto, Euler Motors and Dilli Electric, said spokespersons at these companies.

The Ministry of Heavy Industries is probing allegations of misappropriation of FAME-2 subsidies by several EV makers. Mahendra Nath Pandey, the Minister of Heavy Industries, told Parliament last month that the ministry has received complaints against 12 companies, including Hero Electric and Okinawa Autotech.

It has been alleged that these companies relied on imported parts for their vehicles, failing to meet the desired localization norms. The FAME-2 scheme extends subsidies to EV makers with a caveat of sourcing key components locally to promote the development of a local manufacturing ecosystem.

The government paused releasing funds under the FAME-2 scheme to all EV makers in May after it first received complaints in this matter. The funds have recently been released for some companies that managed to prove their compliance with the norms of the scheme, said multiple people in the know.