Government investigation into Ola, Ather, TVS Motor and Vida's misuse of EV subsides

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Government investigation into Ola, Ather, TVS Motor and Vida's misuse of EV subsides (Image: atherenergy.com)
Government investigation into Ola, Ather, TVS Motor and Vida's misuse of EV subsides (Image: atherenergy.com)

Delhi : The Government of India has recently begun questioning four of the largest electric two-wheeler manufacturers in the nation, namely Ola, Anther, TVS Motor, and Vida, for artificially keeping their product prices low so they could claim subsidies. The aforementioned EV automakers are reportedly under investigation for allegedly underpricing their electric two-wheelers in order to be eligible for subsidies under the Faster Adoption & Manufacturing of Electric Vehicles (FAME) programme. They went on to say that the EV manufacturers might have fabricated at least Rs 300 crores worth of incentives.

The Ministry of Heavy Industries reportedly launched its most recent investigation in response to a whistleblower complaint alleging that these four companies had fraudulently claimed subsidies totaling at least Rs 300 crore by billing necessary items like the charger and proprietary software separately from the two-wheeler. The authorities have gotten in touch with the corporations regarding these allegations.

The Automotive Research Association of India has been given a mandate by the ministry to investigate this incident involving the EV automakers. The government is allegedly investigating almost a dozen additional electric two-wheeler manufacturers separately for allegedly failing to uphold the scheme's localization commitments, according to the report.

Only Ola, the largest EV two-wheeler manufacturer in the nation, has responded to the issue so far. The EV manufacturer, which is based in Bengaluru, has refuted all of the accusations and claimed that, as of right now, it has not received any notice from the ministry regarding this case. A response has not been received from any of the other three manufacturers, TVS Motor, Vida, who have all refrained from commenting on this situation.

Some of these EV manufacturers, according to other sources, have claimed that customers occasionally purchase multiple vehicles and don't always need a separate charger for each vehicle. Additionally, they argued that some add-on software is sold to enhance user experience but is not a required part of the vehicle, so it is charged separately.

In response to the incident, the industry group Society of Manufacturers of Electric Vehicles stated, "Recently, we have noticed the term "misappropriation of funds" being attached to dozens of original equipment manufacturers. Before applying the label that irreparably undermines an organization's very foundation, it is necessary to distinguish between genuine cases and the fraudulent ones.

Businesses can receive government funding by offering discounts to customers of up to 40% off the retail price. This enables businesses to decrease the price of EVs, thereby increasing sales. Phase II of the programme has allocated a total of Rs 2,000 crore to supporters of electric two-wheeler producers financially.

The government approved FAME Scheme Phase-II with a budget of Rs. 10,000 crore for a three-year period starting on April 1, 2019. In order to expand the country's market for xEVs, the Demand Incentive received about 86 percent of the total financial assistance. This phase was introduced in an effort to generate demand. It supports 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid), and 10 lakh e-2 Wheelers.