Performance Audit on the Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India, Ministry of Heavy Industries

Findings

1. Of 2,877 charging stations approved for cities in Phase II, only four implementing agencies commissioned 148; all 1,576 stations approved for highways and expressways were cancelled for negligible progress; and none of the 8,412 stations awarded to three oil marketing companies was commissioned by the 31 March 2024 deadline.

   “There was negligible progress in setting up of charging infrastructure in Phase II. Out of a total of 2,877 charging stations (20 implementing agencies) approved by PISC for 'Cities', only four implementing agencies commissioned a total of 148 charging stations. Besides, no funds were released under 'Highways and Expressways' Project as there was negligible progress in installation/ commissioning of charging stations under this project. The Ministry cancelled all 1,576 charging stations approved under this project. Further, none of 8,412 charging stations awarded to three oil marketing companies was commissioned as on the stipulated completion date of 31 March 2024.”Executive Summary

2. Joint inspection of 104 charging stations found chargers unpowered, chargers removed from site, chargers never installed, staff who did not know how to use them, non-functional management systems, car chargers put in two-wheeler bays and EV bays occupied by other vehicles.

   “Audit team and officials of implementing agencies jointly inspected (February to July 2023) 104 charging stations/chargers including 25 solar plants installed at such charging stations. Various issues were seen during the joint physical inspection such as chargers not being powered, chargers removed from installation site, chargers not found installed at sites, non-awareness of the staff about charging procedure, non-functional Charging Management System, vandalism to occupy parking space designated for EV charging, damaged chargers, car chargers installed at parking designated for two-wheelers, etc.”Executive Summary

3. Five manufacturers broke the localisation conditions of the Phased Manufacturing Programme and were nonetheless paid ₹467.96 crore of demand incentive; two later refunded ₹190.90 crore with interest and recovery from the other three was still in process.

   “Five OEMs violated the localisation requirements stipulated under the Phased Manufacturing Programme despite which demand incentive of ₹467.96 crore was disbursed to them. The violation was discovered at a later stage, after the testing agencies carried out detailed examination of records, physical plant inspection, and strip-down analysis of vehicles, on the specific directions of the Ministry itself. Two out of the five OEMs refunded the entire demand incentive availed by them including interest, amounting to ₹190.90 crore to the Ministry.”Executive Summary

4. Three manufacturers kept the onboard charger out of the ex-factory price of their electric two-wheelers, selling it as an accessory so the vehicle stayed under the ₹1.5 lakh eligibility threshold; they refunded ₹296.52 crore to customers, with ₹29.45 crore still unrefunded as of February 2025.

   “Three OEMs did not include the cost of the onboard charger in the ex-factory price of e-2-wheelers models and instead sold the charger as an accessory so that the ex-factory price of the vehicle did not exceed the notified threshold of ₹1.5 lakh, and the vehicle models became eligible for demand incentive. The OEMs refunded ₹296.52 crore to the customers as a cost of charger and a sum of ₹29.45 crore was yet to be refunded till February 2025.”Executive Summary

5. The incentive portal was built without a project report or service level agreement, so deliverables, timelines, testing protocols and data integrity requirements were never contractually defined, and it could not process claims end to end or validate them.

   “There were discrepancies in the Demand Incentive Delivery Mechanism (DIDM) portal (Phase I & II) such as non-preparation of Detailed Project Report and non-signing of Service Level Agreement for portal development. As such, important aspects such as key deliverables, timelines, testing protocols, data/system integrity requirements, defects management and change management procedures were not contractually defined. Also, the Portal did not have functionalities for end-to-end online processing of claims by the Ministry, and there was lack of validation controls in the Portal.”Executive Summary

6. Because the files the ministry produced carried no vehicle-wise detail, the audit could not test whether the demand incentive reported in Phase I was admissible at all.

   “As the physical/e-files relating to processing of demand incentive claims provided by the Ministry did not contain any vehicle-wise details, Audit was unable to analyse or derive assurance as to the admissibility of the demand incentive reported in these files.”Executive Summary

7. No timelines were set for the testing agencies to issue eligibility assessment reports, and some took up to 497 days.

   “No timelines were notified by the Ministry for testing and issuance of Eligibility Assessment Reports (EARs) by the testing agencies under the FAME India Scheme. In the absence of this, there was no control/monitoring over the time taken by testing agencies to complete the testing and certification process and considerable time (ranging up to 497 days) was taken in issuing EARs by the testing agencies.”Executive Summary

8. There was no whole-vehicle safety conformity-of-production test for electric vehicles in the motor vehicle rules until December 2022 — more than eight years after the scheme was notified — and no annual revalidation in Phase I, so it could not be established that manufacturers kept using the components originally approved.

   “There was no provision for electric vehicle models to undergo Conformity of Production (COP) tests for annual revalidation in Phase-I, rendering it impossible to ascertain that the OEMs were using the same components that were originally tested and approved at the time of initial eligibility assessment. Further there was no provision in CMVR, 1989 for whole-vehicle safety COP testing for electric/battery-operated vehicles till December 2022, i.e. more than eight years after notification of the FAME India scheme.”Executive Summary

9. 5,195 electric buses had been deployed under Phase II as of December 2025 against a revised target of 6,862, and the central server promised by December 2020 to monitor their performance had still not been developed.

   “Under Phase-II, as of 31 December 2025, 5,195 e-buses had been deployed under the Scheme, out of the revised target of 6,862 buses… The central server required to be developed for monitoring performance of e-buses had not been developed by the Ministry despite an assurance given (November 2019) in the third meeting of the Project Implementation and Sanctioning Committee that the central server would be available by December 2020.”Executive Summary

10. ₹12.66 crore spent on one charging project was rendered infructuous — 122 kW chargers and transformers never powered, solar plants never commissioned, cable reported lying with the installation agency — and a central management system already built by IIT Madras in 2017 with ministry funds was never adopted.

    “In case of one project awarded to REIL in January 2019, expenditure of ₹12.66 crore was rendered infructuous as 122 KW chargers and power transformers were not powered; solar plants were not commissioned and unused cable was reportedly lying with the installation agency… Audit observed that IIT Madras had already developed a CMS in June 2017 out of funds released by the Ministry under the Technology Development (R&D) component, but the same was not adopted/operationalised by the Ministry.”Executive Summary

Fact-checks citing this report

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