FAME-II Subsidy Clawback: Greaves Electric Returns Over Rs 124 Crore To Heavy Industries Ministry

Having initially contested the government’s allegations of fraudulent claiming of incentives under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) scheme, Greaves Electric Mobility (GEMPL) has now returned the subsidies it received, to the Ministry of Heavy Industries (MHI). The total amount refunded is a little over Rs 124.90 crore, which includes a little more than Rs 15 crore as interest on the main amount claimed as subsidy. This follows Revolt Motors’ decision to return Rs 50.02 crore to the ministry, as it, too, was under the scanner for alleged misappropriation of funds under the FAME-II scheme, along with Greaves Electric Mobility and five other electric two-wheeler firms – Hero Electric, Okinawa Autotech, Amo Mobility, Benling India and Lohia Auto.

Also Read: Revolt Motors Returns Rs 50 Crore Claimed As Subsidy Under FAME-II Scheme

‘In light of our commitment to consumer interests, to avoid protracted litigation, and without admitting to any of the allegations, contentions, or statements made in the notice, GEMPL, on October 27, 2023, has offered to amicably resolve and bring closure to the matter. Accordingly, GEMPL refunded to MHI the entire incentive claim of Rs 124 crore appx, along with the accrued interest, and without prejudice to our legal rights’, read a statement from Greaves Electric Mobility. The company added it is awaiting ‘confirmation from MHI for taking the necessary steps to withdraw the show cause notice’, as it is hopeful of being eligible for government incentives once again.

The price of the Ampere Primus rose to nearly Rs 1.50 lakh following the withdrawal of FAME-II subsidies for Greaves.

A notice served by the heavy industries ministry on May 25 said Greaves Electric Mobility had allegedly violated phased manufacturing programme (PMP) guidelines, and sought to reclaim incentives to the tune of Rs 124 crore (plus interest) claimed by Greaves Electric Mobility under the FAME-II scheme. Manufacturers claiming subsidies were required to provide a minimum of 50 per cent domestic value addition under the PMP guidelines, but it was alleged that some companies continued to import and use China-made components in a flagrant violation of the rules.

Also Read: Ampere Primus E-Scooter Price Hiked By Rs 39,100; Now Costs Rs 1.49 Lakh

For long, Greaves Electric Mobility’s stance was that it had conducted no wrongdoing, and said it had provided a ‘detailed representation’ to show it had sourced required components from local suppliers. However, the government delisted Greaves, along with six other firms facing scrutiny for alleged subsidy misappropriation, from the FAME-II portal, effectively disqualifying the company from the scheme altogether. As a result, prices of its electric scooters – retailed under the Ampere sub-brand – shot up by as much as Rs 39,100, making them significantly pricier. Sales of Greaves’ e-scooters have slowed considerably since then, and less than 4,000 Greaves scooters have been sold so far in October, according to the latest registration data.

While it remains unclear if the company will be permanently barred from the FAME-II programme, if Greaves is reinstated into the FAME-II scheme, it will lead to a reduction in the prices of its two- and three-wheeler models by a considerable margin, which could provide its business a much-needed shot in the arm.