Finding itself mired in the FAME-II subsidy controversy, two-wheeler giant Hero MotoCorp has decided to reimburse buyers of its maiden electric scooter, the Vida V1. In a media statement, Hero MotoCorp confirmed prices for the Vida V1 will now start at Rs 1.20 lakh, while the top-spec V1 Pro now costs Rs 1.40 lakh (both prices ex-showroom, including charger and FAME-II subsidy) – a difference of Rs 25,000 and Rs 20,000 compared to their launch prices, respectively. The company will also extend this “pricing benefit to existing Vida V1 customers”, said Dr. Swadesh Srivastava, Head – Emerging Mobility Business Unit (EMBU), Hero MotoCorp.
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Hero MotoCorp was named in whistleblower emails to the heavy industries ministry alongside Ola Electric, Ather Energy and TVS Motor Company, with the whistleblower pointing out how all four brands, up until recently, excluded the portable charger to be sold along with the scooter from the vehicle’s ex-showroom cost. Brands resorted to this in order to meet the Rs 1.50 lakh ex-factory price limit, failing which they wouldn’t be eligible for subsidies under the FAME-II scheme.
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However, sources tell carandbike that all four manufacturers were served a notice by the heavy industries ministry on the matter a few days ago, following which the brands have sprung into action and are in the process of finalising reimbursements for customers who paid extra for their vehicle's charger.
Also Read: FAME-II Controversy: Hero Electric Receives Notice For Subsidy Recovery
Ola Electric is said to have agreed to refund over Rs 130 crore to customers who paid over and above the cost of the scooter for the charger. TVS, too, is refunding customers of the iQube, but says the total cost of the ‘goodwill benefit scheme’ to the company will be less than Rs 20 crore. An official comment from Ather Energy, which rejigged its variant line-up and included the cost of the charger into the ex-showroom price of the scooter in April, is still awaited.
The Vida V1 Pro has a real-world range of up to 95 kilometres.
At the time of launch, Hero placed a premium of Rs 20,000 on the portable charger bundled with the Vida V1 scooter. Now, the cost of the charger is built into the price of the scooter. This is also the case for the Ola S1, the TVS iQube and the Ather 450X, all of which now include a portable charger in their ex-showroom prices.
The heavy industries ministry has, in a separate investigation, served notices to Hero Electric as well as Okinawa Autotech, to initiate recovery of subsidies claimed by the two manufacturers. Hero Electric, which, on April 30, had initially refused to have received any such communication, has acknowledged the notice, but remains firm in its stance about not having committed any wrongdoing, maintaining the controversy is a result of a mere ‘difference in interpretation’ and the question of any refund ‘does not apply’. Okinawa denied having received a notice from the government, insisting that the matter is an ‘industry-wide’ issue, as companies were ‘importing certain components’ not available locally, in 2020 and 2021, when the world was reeling from the after-effects of the COVID-19 pandemic.
Uncertainty surrounding the sector owing to allegations of subsidy misappropriation had an impact on electric two-wheeler sales in April. Last month, registrations of electric two-wheelers were down by a substantial 23 per cent, with both TVS and Ather witnessing a sharp drop in sales compared to March.
