Hero Electric Seeks to Resolve Subsidy Dispute with Government Over EV Misappropriation

Hero Electric has approached the Ministry of Heavy Industries (MHI) to settle ongoing disputes and release pending subsidies for electric vehicles (EVs), according to officials. The company is willing to pay a penalty for any violations or compliance issues.

A senior government official stated, “Hero Electric has approached us seeking a resolution of their pending issues… We are examining their request.” Hero Electric, led by Naveen Munjal, benefited from the MHI’s Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) scheme. However, it and five other companies were later found to have violated mandatory localization norms, leading to a government crackdown following an investigation.

As a result, the government demanded refunds of subsidies, claiming they were wrongfully received. While three companies returned the subsidies, Hero Electric contested the government’s claims and requested the release of ₹556 crore in pending subsidies for sales already made, taking legal action in the process.

On the other hand, the Centre is seeking to recover ₹133 crore and additional penal interest from Hero Electric, alleging violations of the FAME II norms. In response, Hero Electric has sent a new communication to the government, aiming to settle the dispute.

The official mentioned that Hero Electric has proposed six options to resolve the matter, including paying a fine, adjusting subsidy amounts, conducting a third-party reinvestigation, mediation, vehicle retesting, and plant retesting. The company has also expressed its willingness to consider any other remedial methods suggested by the ministry.

Hero Electric did not respond to requests for comment. After the FAME II scheme, the Electric Mobility Promotion Scheme (EMPS) was introduced but later merged into the PM E-DRIVE scheme. Due to the ongoing issues, Hero Electric has been barred from participating in any subsequent schemes.

The company has also requested to reverse its blacklisting and regain access to the National Automotive Board (NAB) portal for processing pending subsidies.