Home / Industry / Manufacturing /  Subsidies frozen for erring EV makers


The department of heavy industries has found that certain electric vehicle (EV) original equipment manufacturers (OEMs) have violated the government’s phased manufacturing plan (PMP), a critical eligibility criteria against which it disburses incentives under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme, said the secretary of the department Arun Goel.

The department is now implementing a system to introduce traceability in the way manufacturers share records of the domestic value addition (DVA) in their products with the government, Goel said.

Subsidies have been put on hold for the OEMs being investigated for these complaints, but the government will go to “the root" of the complaints and if OEMs can prove DVA criteria was met, the payouts will be released, Goel said.

The government rolls out incentives for various categories of EVs under the FAME-II scheme with an outlay of 10,000 crore in its existing phase. Last year, the scheme was extended till March 2024. EV OEMs are expected to adhere to the PMP, which has a localization deadline for various components that go into an EV, to be able to claim the consumer demand incentives under the scheme. These incentives help lower the price of their vehicles in the market. However, the government has received complaints that certain OEMs had been claiming these subsidies without meeting its DVA requirements, despite the deadlines being extended in view of covid-19, Goel said.

“We got complaints that some OEMs are not adhering to the PMP rules. Our suspicions were corroborated by spot visits. The contents of the complaints were found to be correct to some extent," he said.


Alisha Sachdev

Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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