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Society of Manufacturers of Electric Vehicles (SMEV) said it has petitioned the National Green Tribunal (NGT) expressing concerns against the government’s move to cut FAME II subsidy and support a ‘Green Tax’ on fuel-based two-wheelers.

The Ministry of Heavy Industries’ latest decision to cut down FAME II subsidies is likely to disrupt India’s growth in the EV sector and consequently have a detrimental impact on the environmental and health indices of the country, Society of Manufacturers of Electric Vehicles (SMEV) said it its petition.

The ministry has suddenly decided to cut down subsidies by 75%, it added.

SMEV further said it has “requested for NGT’s support to a Green Tax on fuel-based two-wheelers so as to incentivise the adoption of green vehicles and contribute to the national objective of environmental preservation and pollution reduction”.

“Electric vehicles are subsidised across the world with the intent to induce a mass shift towards non-polluting energy systems,” SMEV Secretary General Ajay Sharma said.

He further said, “The Ministry’s decision is contrary of this consciousness and an anomaly that defies logic or law especially, as the EV manufacturers were emboldened to shift technologies, work force, capital and enterprise towards this sector based on the support expressed by the government.

Many OEMs are unable to cope with the financial stress caused by actions of the ministry as subsidies amounting to over Rs 1,200 crore have been held up and further demands of retrospective payback of subsidies given in 2019 has been made, SMEV said.

“In fact, it is a matter of time until they shut shop due to lack of working capital, loss of investor and bank support, delay in production timelines and a rapidly vanishing distribution network,” the statement added.