EV Companies To Ask 2.5 Lakh Customers To Refund FAME II Subsidy Amount

Several EV companies requested refunds of the FAME II subsidy to their 2.5 lakh customers. Companies plan to authorize dealers for the refund of the money for the product sold at a lower price. Moreover, the process will be carried out through a public notice issued this week.

What Public Notice states about the different EV companies

Hero Electric, Ampere, Benling, Revolt, and Amo Mobility, as signatories of the public notice issued by the SMEV, have collectively requested refunds from customers. The customers who bought EVs between January 2020 and September 2022 will have to refund the amount. 

In possession of the copy of the public notice, which states, "Customers of e-scooters are hereby notified that the Ministry of Heavy Industries is deciding that certification of electric scooters of these brands sold between January 2020 and September 2022 and subsidized under the FAME II scheme will be suspended due to technical reasons with retrospective effect."

How the Refund Process will affect EV customers

According to experts, it is unlikely that any client would agree to return money to electric vehicle manufacturers. Furthermore, dealers contacting customers and demanding money will negatively influence public perception of EVs.

However, if these companies can retrieve this money, the sum would be handed to the government as part of the penalty imposed on them, according to the SMEV notification. "Customers must cooperate with the dealerships as they are contacting them to refund the subsidies so that they can be returned to the Ministry of Heavy Industries," according to the public notice.

The public notice is a follow-up to SMEV's decision on July 29, 2023, in which only three OEMs - Hero Electric, Benling, and Amo Mobility - agreed to participate in this exercise. The SMEV recommended that OEMs, in this case, pass on subsidies that the Ministry of Heavy Industries (MHI) later found were unpayable to OEMs. They will be permitted to recover them from consumers and remit them to the MHI, thus canceling the account.

Concerns of SMEVs regarding the Refund Imposed

In response to the government's directive to refund subsidies received from 2019 to 2022, the SMEV has sought clarity regarding this refund request. The SMEV has conveyed its inquiries to the Ministry of Heavy Industries through a separate letter addressed to the secretary of the Ministry. 

The association questions whether the subsidy validation process was correctly executed according to established procedures. Moreover, it seeks legal and regulatory provisions that justify the government's request for subsidy refunds from the OEMs.

Furthermore, the SMEV raises concerns about the impact on end customers. It inquires whether the vehicle manufacturers initially disbursed the subsidies directly to the consumers. Given that the reimbursement process presumably verified the appropriate distribution of these subsidies. The association questions why the refunds are being sought from the OEMs rather than from the end consumers who directly benefit from the subsidies.

What do different EV companies think about the decision?

According to the companies, the Ministry of Heavy Industries' demand for subsidy refunds lacks a valid foundation. The acts done by the MHI in this respect violate established standards, practices, and policy guidelines.

The SMEV has expressed empathy for OEMs who might be forced to comply with the irregularity of subsidy refunds. It indicates that while this situation could potentially lead to embarrassment for the Ministry, the issue is expected to eventually be rectified. 

However, the SMEV maintains that if any OEMs are involved in misrepresentation or misappropriation and openly accept such actions, similar to four OEMs in the past. The association refrains from making specific comments. It implies that such OEMs can address the matter through their chosen settlement methods. If the stated notice is indeed issued, it remains to be seen how these companies intend to collect the subsidized amount from their customers. 

Check out the latest BMW CE02 electric scooter that was spotted in India.

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