Electric 2w: Electric 2W makers asked to return Rs 500 cr for using Chinese parts under Make in India banner

The government of India is demanding that six electric two-wheeler manufacturers, including return Rs 500 crore ($60 million) worth of subsidies for violating localization rules since it is holding back unpaid subsidies from other EV 2W manufacturers, turning off a much needed source of capital in the process, as per a report by ET.
The move can be traced back to last year when a host of electric two-wheeler fire instances emerged across the country in quick succession, prompting the government to probe whether companies were meeting the localization norms of a subsidy program that requires them to develop the products in India itself. It was revealed that a few manufacturers were importing ready-to-use parts, mainly from China, and thus had little control over the quality of their end products, leaving customers vulnerable to life-threatening incidents.

The six EV manufacturers include Okinawa Autotech Pvt, Hero Electric, Greaves Electric Mobility Pvt, Revolt Motors, Benling India Energy & Technology Pvt and Amo Mobility Solutions Pvt. These companies are said to be losing ground and struggling to attract investors as the government holds back subsidies worth Rs 1,200 crore. According to the Society of Manufacturers of Electric Vehicles (SMEV), e-scooter startups have lost a combined Rs 9,000 crore without the incentives.
The stringent EV localization rules are slowing progress in electrifying two-wheeler mobility in India, however, considering the risk that cheap Chinese components bring along with them, the government has no other choice but to compel two-wheeler manufacturers to use made-in-India parts.
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