Smaller e-bike cos slip after FAME red flag

Time of India

14-07-2025

Electric two-wheeler makers penalised for violating Faster Adoption and Manufacturing of Electric Vehicles-II (
FAME-II
) subsidy norms have seen a collapse in sales, with several smaller players nearly vanishing from the market. The government's crackdown has consolidated market share among a few players.
Gurugram-based
Okinawa Autotech
saw its annual sales nosedive from 31,618 units in 2023 to 4,855 in 2024. In the first half of 2025, it has managed to sell just 1,422 vehicles, according to data from the government's Vahan portal.
Ampere Vehicles
, owned by Greaves Electric Mobility, also recorded a drop in volumes. Combined sales reported on Vahan under both Ampere and Greaves fell to 26,963 units in 2025 so far, down from 36,148 units in 2024 and 66,958 in 2023.
Other manufacturers such as AMO Mobility and Benling India have almost disappeared from the market, selling just 25 and 95 vehicles, respectively, in 2025. Launched in 2019, FAME-II aimed to promote domestic manufacturing by mandating that a fixed percentage of components be sourced locally to qualify for demand incentives. However, between late 2022 and early 2023, the government began investigating multiple companies after receiving complaints of non-compliance.
'The market has been a bit slow but is likely to improve… We are finding our own ways to sell our vehicles,' said Sushant Kumar, founder of AMO Mobility, without elaborating.
Hero Electric
, once a market leader, is now undergoing insolvency proceedings. The resolution professional has invited bids for the bankrupt company. Hero had 29,965 vehicle registrations in 2023, which plunged to 2,916 units in 2024 and 382 units so far in 2025.
'This is a case of regulatory action that essentially took the wind out of these companies,' said V G Ramakrishnan, managing partner at Avanteum Advisors LLP. 'They benefited from the subsidies without following the rules and ultimately paid the price. They had a business model but failed to invest in localisation or comply with government directives, yet continued to claim incentives.'
The decline in registrations follows the Ministry of Heavy Industries' decision to suspend subsidy disbursals after several electric two-wheeler makers were found violating Phased Manufacturing Programme (PMP) localisation norms under FAME-II.
A total of 13 companies came under scrutiny. Six including Hero Electric, Okinawa Autotech, Benling India, AMO Mobility, Greaves Electric Mobility and Revolt Motors were found to have violated the norms. Following detailed audits and vendor invoice checks, these companies were directed to return subsidies, with the total clawback estimated at ₹469 crore.
Among these, Revolt, Greaves, and AMO Mobility returned a combined ₹170 crore to the government. Hero Electric, Okinawa Autotech, and Benling India contested the claims and approached the courts.
'The temporary dip in numbers during 2024 was primarily due to a voluntary business pause we undertook while seeking regulatory clarity around the FAME-II subsidy criteria. Like several players in the industry, we faced challenges, which significantly impacted operations across the sector,' said a spokesperson for Greaves Electric Mobility. 'However, following the resolution and payment of dues, we have resumed normal business operations and are witnessing a steady recovery in registrations and market momentum.'
Benling India declined to comment on the matter, while Hero Electric's Naveen Munjal, Okinawa, and Revolt Motors and did not respond to queries.
In December 2024, the Serious Fraud Investigation Office (SFIO) launched inquiries into Hero Electric, Benling India and Okinawa Autotech for allegedly falsifying documents to show compliance. Raids and document seizures were carried out as part of the probe into the fraudulent availing of subsidies worth ₹297 crore.
The loss of subsidies led to sharp price increases across models, denting consumer demand and leading to a collapse in sales at these firms.
'Some companies deliberately ignored the policy, which had commercial consequences,' Ramakrishnan said. 'When the government enforced localisation norms strictly, these firms lost out. But this did not mean the entire market collapsed. In fact, new players entered, and existing compliant players expanded.'
While smaller, non-compliant players crumbled, the market share of large, compliant players such as TVS Motor, Bajaj Auto, Ola Electric, and Ather Energy has grown. TVS and Bajaj, leveraging strong supply chains and brand credibility, are now leading the electric two-wheeler segment.
Ola Electric, though facing increased regulatory scrutiny and a decline in market share, continues to scale production and remains among the top players. Ather Energy has also benefited from the shake-up, with a steady rise in registrations and continued investments in new models and charging infrastructure.
The government, meanwhile, is working on a successor programme, referred to as
FAME-III
, aimed at promoting electric mobility while ensuring stricter compliance and a stronger focus on domestic manufacturing. The new policy is expected to further support the transition to cleaner mobility and reduce the country's dependence on fossil fuels.