Following recent failures under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) II scheme, government sources say that it is considering conducting random inspections of electric vehicles (EVs).
The Automotive Research Association of India (ARAI) will handle the inspections. This comes after the government recently took an action against the Hero Electric and Okinawa Autotech, two significant companies in the EV business.
“The ARAI will select a vehicle at random from the market and test it to check if the manufacturer is following the guidelines. If there is any violation, the ministry (of heavy industry) will take the same action it took against localisation and ex-factory price defaulters,” a government official said.
The ARAI, founded in 1966, is India’s top organisation for automotive research and development. It was created in partnership with the Indian government. It is an independent organisation connected to the Ministry of Heavy Industries.
Hero Electric and Okinawa Autotech received recovery notices from the ministry for allegedly breaking localization rules. The government’s subsidy scheme to promote electric vehicles has “deregistered” both companies.
India’s shift to EVs was facilitated by the introduction of the FAME scheme. While FAME II has been successful in promoting the use of EVs, claims of money being wrongfully taken by avoiding localisation and ex-factory price rules have soured the mood.
Currently, inspections are conducted annually to lessen the burden of compliance on companies and foster ease of doing business. Before awarding a certificate of FAME India Phase II eligibility fulfilment, the testing organisations “IARI and ICAT” conduct their inspection once a year.
“Because of recent events we would have to start random checks,” a senior official said.
According to the FAME scheme, 50% of the components in an EV must be manufactured and supplied domestically in order to qualify for the subsidy.
The government had halted the claims of a dozen original equipment manufacturers in September, pending the outcome of an ongoing audit after receiving a report that companies were not adhering to localization standards.
(Credit: Ruchika Chitravanshi and Nitin Kumar/Business Standard)
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