India EV: Government buys EVs back from users to take apart and check for local parts – EQ Mag Pro
Dismantle and investigate is the new approach taken by the government to get to the bottom of the alleged scam of misappropriating electric vehicle (EV) subsidies.
At the direction of the Department of Heavy Industry, dozens of electric two-wheelers have been bought back from customers to take them apart and inspect whether the manufacturers have violated localization rules under the government’s flagship EV promotion, Faster Adoption and Manufacturing or Electric and Hybrid Vehicles in India (FAME-India).
The Automotive Research Association of India, Pune (ARAI) and International Center for Automotive Technology (ICAT), Manesar are conducting the inspection, people with direct knowledge of the matter said, on condition of anonymity as the details are not public. Their report is expected in a few days, one of the people said.
Dismantling the vehicles will provide “irrefutable evidence” as to whether the components used in a vehicle sold on a subsidy have been produced locally according to guidelines or imported, the people said.
The inspection includes multiple units from all electric two-wheeler manufacturers that have benefited from subsidies under the FAME-India scheme. The vehicles for testing are randomly chosen and purchased from customers in different cities after explaining the reason for this exercise.
Questions sent to the Ministry of Heavy Industries, which oversees the FAME-India scheme, as well as the testing agencies ARAI and ICAT went unanswered on Tuesday as it went to press.
The FAME-India scheme comes with a caveat from manufacturers who source key components such as motors and controllers locally for their EVs, with the aim of creating a local ecosystem and not subsidizing cheap imports from China with taxpayers’ money. Manufacturers have been given staggered deadlines for the localization of various components in a phased production program.
There are allegations that some companies flout localization guidelines and use imported components, mainly from China, despite claims to the contrary when claiming subsidies.
These companies are believed to have gotten their certification to the FAME scheme by sending vehicles made with locally sourced components for testing, but then using cheaper imported substitutes for mass production, experts said.
The testing agencies have audited the factories of multiple EV manufacturers and found evidence of non-compliance with localization standards, experts said.
Grants to Hero Electric and Okinawa Autotech have already been suspended and the further course of action will be decided on the basis of this investigation.
When contacted before, Hero Electric declined to comment, while Okinawa told ET it adhered to all guidelines.
The FAME scheme subsidizes the cost of purchasing EVs to make their prices competitive compared to conventional vehicles. Manufacturers must be certified every year by ARAI or ICAT for their compliance with the rules of the scheme in order to continue receiving the subsidies. According to a government website, no fewer than 23 companies have applied for subsidies under the scheme so far.
Source: PTI
