Greaves Electric's Rs 125 Crore Offer To Settle FAME Subsidy Violation

Greaves Electric Mobility, formerly known as Ampere Electric Vehicles, has conveyed its intention to return the subsidy it received under the Rs 10,000 crore Faster Adoption and Manufacturing of Hybrid Electric Vehicles in India (FAME India) initiative, according to a media report.

Greaves is among the seven producers of electric two-wheelers (e2w) that the government has charged with failing to follow local sourcing requirements. For the second time in its history, a corporation has voluntarily offered to repay the subsidy by starting the process of refunding about Rs 124.91 crore.

Seven companies, Hero Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto, and AMO Mobility—were hit with recovery letters totalling Rs 450 crore by the government for not adhering to the local sourcing rule stipulated by the FAME India programme to qualify for incentives. These companies were also precluded from making future claims under the scheme.

Official estimates indicate that Greaves has the largest outstanding amount among these companies, with Okinawa and Hero ranking second and third, each with arrears exceeding INR 100 crore.

Sanjay Behl, Chief Executive Officer of Greaves Electric Mobility stated that the company is actively collaborating with the government to gain a deeper understanding of their concerns.

In a similar context, in August, Revolt Intellicorp, owned by RattanIndia, paid a penalty of Rs 50.02 crore to the government for non-compliance with the guidelines of the FAME subsidy programme, which aims to promote local manufacturing and the adoption of electric vehicles.

The FAME subsidy programme was introduced to stimulate electric vehicle adoption and has successfully increased the sales of environmentally friendly two-wheelers in the country. One of its primary objectives is to encourage domestic production of these vehicles. However, allegations of non-compliance with localisation regulations have posed challenges to the programme's effectiveness.

Companies such as Ola Electric, Ather Energy, TVS Motor Company and Hero MotoCorp, which have also faced accusations of violating FAME guidelines, have been engaged in discussions with the Ministry of Heavy Industries to resolve these issues.

These companies were accused of mispricing their higher-end vehicles to qualify for subsidies. Collectively, these four companies have deposited Rs 129.30 crore with IFCI, a state-run non-banking finance company, as part of their efforts to rectify the misclaimed amounts and ensure they benefit consumers as intended.