CCI Rejects Plea Against Four E2W Makers Of Abusing FAME Subsidy

The Competition Commission of India has dismissed a plea that accused Hero MotoCorp Ltd., Ola Electric Mobility Pvt. Ltd., TVS Motor Co. and Ather Energy of abusing their alleged dominant position in India’s electric two-wheeler market.

The automakers were accused of unbundling crucial equipment, including chargers and software, to limit the ex-factory cost of electric scooters under Rs 1.5 lakh—the prescribed limit to avail subsidy under the government’s Faster Adoption and Manufacturing of Electric and Hybrid Vehicles Policy, or FAME, scheme.

That, according to the anonymous petitioner, allowed them to usurp a major chunk of the corpus allocated under the policy and deprived “genuine manufacturers” from availing of the benefits under the scheme.

“Their modus operandi involves a calculated approach to pricing (predatory pricing); while the final product is presented within a price limit, essential components necessary for the vehicle’s operation are unbundled and offered/sold separately at additional cost,” according to a CCI order that quoted the informant.

“Consequently, these entities continue to maintain a higher market share as a result of the illegal use of the benefit under the policy, thereby having a negative impact on competition.”

NDTV Profit has seen a copy of the CCI order.

CCI, however, ruled that India’s EV market is in a growth stage. Automakers are coming up with “lots of varieties and affordable ranges” as part of the electric mobility overdrive. The competition is only going to intensify here. Moreover, Ola Electric, Hero MotoCorp, Ather Energy and TVS themselves entered the electric two-wheeler space less than five years ago—an argument against their alleged market dominance stands moot, it said.

“There appears to be no single player which is able to exert market power in its favour or appears to demonstrate a position of strength to operate independently of market forces,” according to the CCI order that cited market share data for fiscal 2022.

“The Commission finds that no prima facie case of contravention of the provisions of Section 4 of the [FAME] Act is made out against any of the companies. Accordingly, the information is ordered to be closed forthwith… Consequently, no case for grant of relief arises and the said request is rejected.”