New Delhi: The central government is considering reinstating financial support for electric two-wheeler manufacturers Revolt Motors, Greaves Electric Mobility, and Amo Mobility under its Electric Mobility Promotion Scheme 2024 (EMPS 2024). However, it plans to exclude Hero Electric, Okinawa Autotech, and Benling India from all future government schemes, according to a government official.

This decision comes after Revolt, Greaves, and Amo returned wrongfully claimed subsidies to the government. On the other hand, Hero Electric, Okinawa, and Benling India have not yet returned the subsidies and have instead taken the matter to court.

An initial investigation into the violation of vehicle localization norms mandated under the Faster Adoption & Manufacturing of Electric Vehicles in India (FAME India) scheme resulted in notices being issued for the recovery of Rs. 469 crore in subsidies distributed to these companies for sales made between 2020 and 2023.

"The process is underway to blacklist these errant companies from all government schemes. They have already been debarred from all schemes under the Ministry of Heavy Industries (MHI)," the official told ET.

Responding to the allegations, a spokesperson for Okinawa Autotech said, "We have filed a writ petition in the Delhi High Court to recover our outstanding FAME II dues of upwards of INR 425 crore, and our case is sub judice. Okinawa Autotech has always been compliant with the scheme guidelines, as observed by the committee headed by Joint Secretary Mukta Shekhar of the MHI."

The spokesperson added, "Okinawa has not availed incentives from the beginning of the last financial year, and we believe the electric two-wheeler industry has reached a stage where it is self-sufficient."

According to Ministry of Heavy Industries officials, the report by Joint Secretary Mukta Shekhar has not been accepted by the Centre, and a fresh probe into the FAME scheme has been ordered. The new investigation did not concur with the findings of the Shekhar report.

"Since the matter is sub judice, we cannot comment on this," said a spokesperson for Hero Electric.

Amit Kumar, CEO of Benling India, stated, "The whole matter is under scrutiny of the Delhi High Court. We would not like to comment on any matter that is sub judice."

Regarding the restoration of subsidy benefits to some electric two-wheeler makers, the official cited above said, "The Ministry of Heavy Industries is awaiting the finance ministry's approval on the matter. The process to bring them back under the subsidy fold is underway." The official added that Revolt, Greaves, and Amo Mobility have paid back around INR 170 crore to the government.

The government launched the first FAME scheme in 2015 with a budget of Rs. 895 crore. FAME II, an expanded iteration of the program, was rolled out in 2019 with an outlay of INR 10,000 crore. These schemes aimed to support the sale of locally produced electric vehicles (EV).

Subsidy disbursals under the scheme were linked to a phased manufacturing program (PMP) to gradually increase localization levels over time.

According to government sources, companies did not adhere to the PMP but continued seeking FAME subsidies, which undermined the scheme's purpose.