Electric vehicles: OEMs push up EV prices five months into FAME subsidy halt by Centre


The halt on Faster Adoption and Manufacturing of (Hybrid &) (FAME) subsidies by the Centre has pushed defaulter original equipment manufacturers (OEMs) to increase the price of (EVs). Majority of the EV players have increased prices of their products in proportion to the subsidies they had earlier received, or by at least 20 per cent of the subsidy amount.

However, large players such as claim they are selling EVs at subsidised rates. “We are selling all our products with subsidy benefits despite not getting it from the government for the last 16 months,” said Manu Sharma, spokesperson, .

Though the company has raised the price of its products by Rs 8,000-10,000, Sharma said the changes were due to “enhancement in technologies and not due to subsidy halt.”

Okinawa, the country’s second largest electric two-wheeler (E2W) manufacturer, has also increased the price by Rs 10,000-40,000. Okinawa did not respond to Business Standard’s queries seeking clarification on the subsidy issue.

Both Okinawa and were in the first list of OEMs whose subsidy was halted in September. So far, of the 64 OEMs registered under the FAME-II, about 17 have been barred from seeking subsidies under the scheme, according to the data available on the website of ministry of heavy industries. The government’s move came in the wake of allegations related to misuse of subsidy allocation and non-compliance with the standards required to be eligible for these subsidies.

“The prices of Okinawa products such as the OKHI-90, IPraise+, Praisepro have been increased by Rs 40,000, Rs 37,000 and Rs 13,000 respectively. We are not giving any subsidy from our end,” said an Okinawa dealer in Gurugram.

EV dealers sell at subsidised rate and then apply for subsidy at the MHI portal for the same.

However, an Okinawa dealer in South Delhi said they have stopped applying for the subsidy on the government’s website. “We do not apply for reimbursement of subsidies. The rate at which we buy our products has increased and we are selling it at those rates only,” the dealer said.

The subsidy for EV makers ranges from Rs 17,000 to Rs 66,000 per electric two-wheeler. It is Rs 32,200 to Rs 108,000 for an electric three-wheeler.

According to data on the Vahan portal of the ministry of road, transport and highways, Okinawa and Hero Electric contribute to 90 per cent of the total vehicles sold by the 17 barred OEMs and 20 per cent of the overall 1 million vehicles sold in the country in 2022.

E-mails and calls to other ineligible OEMs such as Atul Auto, Victory Electric and Thukral Electric remained unanswered till the time of going to press.

Speego, a three-wheeler manufacturer, whose subsidy was halted around October, has increased the price of its product by Rs 35,000—equivalent to the subsidy amount it was getting earlier. Speego is now selling its e-rickshaw at Rs 1.8 lakh.

Dilli Electric, another three-wheeler maker whose subsidies were halted, has raised its e-rickshaw price by Rs 25,000. It was getting a subsidy of Rs 36,000 on the vehicle. “We are selling our product without subsidy now, but have diluted our profits by decreasing the base cost of our product due to market competition,” said Amit Jhamb, Director, Dilli Electric.

According to EV industry lobby group, Society of Manufacturers Of (SMEV), the total amount of subsidy withheld has crossed Rs 1,100 crore. Though the government is investigating the matter, industry players say that if nothing has come out of the investigation in the last five months then why OEMs are forced to bear the loss.

“We are paying for the government sponsored scheme from our pockets. Why is the government not completing its investigation? If it does not come out with a solution soon it would become different for OEMs to stay in business,” said an OEM on the condition of anonymity.

OEMs with expired subsidies

Subsidy ranges: Rs 17,000 to Rs 66,000

Hero Electric
Li-ions Elektrik

Tunwal E-motors

Microcon I2i

Subsidy range: 32,200 to Rs 108,000

Atul Auto
Victory Electric
Best Way
Energy Electric
Thukral Electric
Dilli Electric

Speego Vehicles

Scooters India
Euler Motors

Booma Innovative

Balan Engineering

Fitwel Mobility

Source: Website of Department of Heavy Industries


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