The union government's investigation against 17 electric vehicle (EV) companies for alleged violation of the FAME scheme is nearing completion. The government is likely to start releasing subsidies for those companies that were not found guilty of any violation.

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Further, CNBC-TV18 learns that the government is likely to reduce demand incentives for electric two-wheelers from 40 percent of the vehicle cost to 15 percent.

Approximately Rs 1,100 crore of subsidies had been held back by the ministry of heavy industries over the last year for these 17 players because of various violations.

With the probe now getting over, the government will start disbursing subsidies to players against whom no violation has been found. However, against companies like Hero Electric and Okinawa where there has been a violation of localisation criteria, the subsidy will continue to be on hold.

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There have also been stakeholder consultations with the ministry of heavy industries on subsidy support for electric two-wheelers under the FAME-II scheme.

Rs 2,000 crore which had been allotted for electric two-wheelers is nearing exhaustion and the industry is seeking additional support under the Rs 10,000 crore allocation.

CNBC-TV18 learns that the government could soon invest an additional Rs 1,500 crore but with a reduced subsidy allocation per vehicle.

Also Read: India government favourably considering allotment of more subsidy under FAME II: Sources

So from the current 40 percent of the vehicle cost or Rs 15,000 per kilowatt hour, the subsidy support per vehicle could come down to Rs 10,000 per kilowatt hour or 15 percent of the vehicle cost. A final decision from the government is awaited.

(Edited by : Vivek Dubey)

First Published:May 18, 2023 6:26 PM IST