FAME subsidy recovery from customers of electric scooters bikes

Since the govt. has asked them to return wrongly claimed subsidies, the SMEV wishes to recover this amount from the customer.

In a bizarre move, a clutch of electric vehicle makers – Hero Electric, Benling and Ammo Mobility have approached the MHI with a proposal seeking their approval to approach the customer to refund money for a product sold to them at a lower price.

The proposal draws upon the earlier precedent MHI set regarding 4 OEMs who were accused of overcharging customers. In that case, the MHI ruled that the OEMs must return the overcharged sums to customers.

Stuck between a loss making operation and outstanding penalty dues to be paid to the government, these EV makers collectively wrote to Society of Electric Vehicle Manufacturers Association to recover money from the customers to stay afloat.

Given the significant penalty levied by the government on these vehicle makers and a significant slowdown in sales over the last 18 months on disrupted sales, the impacted vehicle makers may potentially have to file for bankruptcy, the association feared.

SMEV said that post numerous discussions with EV manufacturers, and those who are impacted by MHI’s decisions since the last 18 months, an unusual, but obvious, possibility for a logical solution has emerged and the OEMs have come around to accepting it as the best under the circumstances.

Sanjay Kaul has written to Hon’ble Minister, MHI Shri Mahendra Nath Pandey proposing these steps in order to find a prompt resolution of this long pending issue.

SMEV has proposed that since in this case, OEMs have passed on subsidies, which subsequently MHI has ruled as unpayable to OEMs, they be allowed to recover these from customers and pass it back to the MHI, annulling the account.

It is to be noted that the department levied a penalty on some OEMs a few months ago for overcharging the customers and then asked them to return the amounts, it is possible that the monies that MHI is demanding from the other set of OEMs for non-compliance, can be similarly recovered by them from the customers and returned to the Department, said the letter.

The letter said, “Since the MHI is suggesting that the subsidies passed on to customers by OEMs now stand cancelled, due to technical reasons decided by MHI subsequently, the customers who have taken such subsidies can be asked to return these to OEMs in all fairness.”

These vehicle makers have indicated a willingness to share customer data with the Department who may be affected by a public announcement. They are also open to taking out a Public Notice asking such customers to deposit back the excess rebates they had received as subsidies, under the Department’s guidance, claimed SMEV.