Electric Vehicle Manufacturers Set to Reimburse Charger Expenses to Customers

Indian electric two-wheeler manufacturers, including Ola Electric, Ather Energy, TVS Motor, and Hero MotoCorp, are planning to issue refunds to their customers in order to qualify for incentives under the Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) program. 

The refunds will be given for the cost of EV home chargers that were attached to the two-wheelers. This move is being made as a means of securing the delayed incentives offered by the government.

As per a report by Mint, the EV makers had previously been charging customers separately for the cost of the EV chargers. This was done in order to enable buyers to take advantage of the FAME incentives, which are only available on electric vehicles that cost up to Rs. 1.5 lakh. By offering refunds, the EV manufacturers are hoping to meet the criteria for the incentives and thus encourage more buyers to purchase electric two-wheelers.

After discovering a loophole, the government ceased providing subsidies worth Rs. 800 crores. Since then, most electric vehicle manufacturers have rectified the issue and are now including EV home chargers as part of the vehicle's invoice.

It is believed that Ola Electric will be the most affected by this change. The electric two-wheeler manufacturer, which commenced operations in 2021, will allegedly have to refund Rs. 130 crores to customers who were charged for home chargers that came with their S1 and S1 Pro electric scooters. Ola Electric has not yet released any official statement regarding the refund amount.

Ather Energy, TVS Motor, and Hero MotoCorp have not made any official statements or clarifications regarding the matter. The exact total of the refund has not been disclosed publicly. Nonetheless, the Society of Manufacturers of Electric Vehicles (SMEV) estimates that EV manufacturers are collectively owed approximately Rs. 1,200 crores by the government.

The distribution of FAME benefits to electric vehicle (EV) makers by the government has been halted due to irregularities that were discovered. As a result of not meeting the localisation norms, at least two electric two-wheeler manufacturers were suspended from receiving incentive benefits. Meeting these norms is a requirement for being eligible for FAME subsidies.

There is uncertainty surrounding the future of the FAME II subsidy. The Indian auto sector had requested an extension of the FAME II subsidy scheme prior to the Union Budget this year, but this demand was not met. Various stakeholders in the industry, including vehicle manufacturers, component makers, and charging infrastructure developers, had hoped for tax relaxations, benefits, and incentives.