Indian EV manufacturer disputes claims of incentive fraud

NEW DELHI: The government said that India's Avon Cycles Ltd. was being probed for embezzlement in connection with a system that provided subsidies to automakers to increase the sale of Electric Vehicles (EV). The firm, however, has denied any wrongdoing.

Under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) initiative, the Indian government is compensating electric car and hybrid vehicle manufacturers for lowering the purchase price of their vehicles.

The 100 billion rupee ($1.21 billion) program's rules were allegedly broken by 12 makers of electric vehicles and parts, including Avon Cycles, the minister for heavy industries Mahendra Nath Pandey said parliament on Tuesday.

Reuters' request for comment from the other businesses identified by Pandey was not met with a response.

Two of the 12 firms, according to Pandey, have been barred from reimbursing incentives as a result of the probe.

In an email on Thursday, Avon Cycles stated that none of its two-wheeler models were covered by the program and that its three-wheeler models that qualified for the program "completely met the eligibility requirements."

The company stated in a statement, "At this time, we are only present in the low speed category of two-wheelers, which implies that we do not have any two-wheeler models that are covered under FAME - phase 2 scheme and as a result, no subsidies have been claimed in the two-wheeler segment by 'Avon Cycles Limited'."

We do have two different three-wheeler models that are eligible for the FAME - phase 2 program and completely satisfy the requirements established by the relevant authorities. Additionally, the sales quantities of these three-wheeler vehicles offered under the mentioned program have been negligible thus far.

By 2030, India plans to increase the market share of electric vehicles from its current 1%, or around 3 million vehicles sold annually, to 30%.