EMPS: Electric Vehicle Firms Ousted from New Subsidy Program Over Past Allegations

New Delhi. It's been over a month since the launch of the new subsidy program for the electric vehicle (EV) industry, but several key two-wheeler original equipment manufacturers (OEMs) find themselves excluded from claiming these subsidies.

Despite previous controversies over subsidy misappropriation, these manufacturers are still awaiting approval to participate in the latest subsidy scheme, the Electric Mobility Promotion Scheme (EMPS).

What are the challenges in subsidy approval?

Leading EV manufacturers like Hero Electric, Okinawa Autotech, Greaves Electric Mobility, and Revolt Motors have not been registered for subsidies under the EMPS. These companies were previously under scrutiny by the Ministry of Heavy Industries for alleged subsidy misappropriation under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme. Although some OEMs had refunded the disputed amounts, others, like Hero and Okinawa, contested the ministry's demands in court.

Impact on market

The subsidy controversy has reshaped the market dynamics of the EV industry. Established players like TVS Motor Company, Bajaj Auto, and Hero MotoCorp have witnessed significant growth in their e2w sales, while market leaders like Okinawa have experienced a decline in market share. Despite challenges, the top e2w OEMs - Ola, TVS, and Ather - have maintained robust sales figures, reflecting the sector's resilience.

Future outlook

Some OEMs, excluded from the EMPS, are opting to forgo subsidies and focus on value engineering and cost reduction strategies to remain competitive. These manufacturers are committed to regaining lost market share through consistent product innovation and customer-centric approaches.

Electric Mobility Promotion Scheme 

Despite ongoing legal battles, the EMPS was launched on April 1 with a corpus of INR 500 crore. However, OEMs seeking subsidies must register afresh on the government portal. While some OEMs await registration, others like Revolt Motors are in the final stages of onboarding onto the subsidy program.

The saga of subsidy misappropriation has stirred controversy within the EV industry. Questions have been raised about the government's enforcement of localization norms and its testing agencies' oversight in the certification process. The Ministry of Heavy Industries, responsible for the subsidy program, has faced criticism for its selective punitive actions against specific OEMs.