India’s FAME II Policy and the Challenge with Electric Scooter Prices
India’s FAME II policy aimed to incentivise the purchase and use of electric vehicles in the country by providing subsidies and benefits to eligible EVs. However, the policy set a limit on the retail price of electric two-wheelers that could qualify for these benefits, excluding those priced above INR 1.50 lakh per unit.
Manufacturers found a loophole by selling electric scooters within the price range and charging separately for necessary chargers and proprietary software. As a result, the Ministry of Heavy Industries stopped subsidies to non-compliant manufacturers, prompting some EV makers to take corrective action to repay overcharged customers.
Electric Scooter Manufacturers Repay Overcharged Customers
Leading electric scooter manufacturers, including Ola Electric, TVS Motor, Ather Energy, and Hero MotoCorp, have taken corrective measures to repay customers who paid more than the threshold limit set by FAME II.
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Ola Electric will refund INR 130 crore to S1 Pro customers who purchased the vehicle before March 30, 2023. TVS Motor will repay customers who bought the iQube S model between May 2022 to March 2023, with an estimated refund amount of INR 15.61 crore to be paid to 87k customers. Hero MotoCorp will refund 1,100 Vida V1 Plus and V1 Pro customers who purchased the vehicle before March 2023. Ather Energy will repay INR 140 crore to 95,000 customers who purchased the Ather 450x e2W until April 12, 2023, and an additional INR 25 crore for those who didn’t buy upgraded software.
Promoting Trust and Transparency in the EV Industry
These refunds are significant steps towards promoting customer trust and transparency in the EV ecosystem. By complying with FAME II guidelines and taking corrective action to repay customers, manufacturers aim to restore consumer confidence in the EV industry and encourage wider adoption of electric vehicles.
The corrective measures taken by EV manufacturers highlight the importance of regulatory oversight and enforcement to promote a fair and transparent market for EVs. By complying with these guidelines, manufacturers can qualify for benefits and subsidies that further promote the adoption of EVs in India.
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