EV Makers Expect 6-Month Extension For Compliance With Incentive-Linked Battery Tests

Under pressure to comply with a slew of regulations, electric vehicle (EV) manufacturers are reportedly expecting a six-month extension to the deadline for obtaining mandatory certifications related to battery tests.

These certifications are especially important as they make original equipment manufacturers (OEMs) eligible for claiming subsidies under the FAME-II scheme and production linked incentives (PLI) scheme for advanced chemistry cells (ACC).

“We are expecting the timeline will be extended to October 2023, and fresh consultations will be held with the industry, post which the final tests, harmonised with the CMVR (Central Motor Vehicles Rules) rules will be notified,” an industry executive told Livemint. 

At the centre of the debate is the Ministry of Heavy Industries’ (MHI’s) November 2022 notification which set a new testing benchmark to enhance safety of EVs following a spurt in fire incidents involving ebikes. The norms aim to increase safety at three levels – battery pack, battery management system and cell level – and compliance with them is mandatory for claiming subsidies and payouts under various schemes. 

The deadline for the implementation of the MHI guidelines ended on March 31, however, no OEM has reportedly been able to obtain the certification. With no official announcement from the government, the players could be left facing a situation where they may not be able to avail the subsidies. 

Speaking on the delay in compliance with the MHI’s norms, a senior auto executive said that the industry was largely focused on first complying with the new battery safety norms (AIS 038 and AIS 156) issued under the CMVR and notified by the Ministry of Roads, Transport and Highways (MoRTH). 

MoRTH issued the guidelines in September last year and they were to come into effect from March 31, 2023. 

It is pertinent to note that while the MHI’s norms are necessary to claim incentives, the transport ministry’s guidelines are mandatory for vehicle manufacturing. It appears that production, rather than claiming incentives, took prominence among OEMs while deciding compliance with the rules. 

OEMs Knock Govt’s Doors

As uncertainty grew about claiming subsidies post the April 1 deadline of the MHI’s directives, multiple industry bodies approached the government. 

After multiple representations, the industry groups now believe that a notification providing clarity on the matter could be issued in the next few weeks. The report, quoting sources, said that the government is likely to extend the timeline for compliance with the norms by six months. 

In its representations before the Centre, the OEMs also sought to make tests, prescribed under the MHI’s November 2022 directive, segment-specific. They also called for harmonising the MHI-mandated certifications with the tests that OEMs and battery manufacturers have to currently undertake to comply with CMVR norms.

“We have requested the government to make the tests segment-specific, give the industry a reasonable period of time to implement the new requirements and hold consultations with the industry before notifying rules of such nature,” a source was quoted as saying. 

The drama adds another twist to the ongoing tug of war between the Centre and OEMs over misappropriation of FAME-II subsidies. Many EV manufacturers are under the scanner for claiming subsidies without complying with minimum localisation norms. A probe is currently underway involving as many as 12 such players including Hero Electric, Jitendra EV, Okinawa Autotech, Ampere Vehicles, Revolt, among others. 

While the centre plans to soon finalise the quantum of action against Hero Electric and Okinawa Autotech for claiming subsidies under false pretences, others players such as Ola Electric, Ather Energy, TVS Motor, and Hero Motocorp could also face regulatory heat for artificially keeping their vehicle prices lower to claim incentives.

While reports have emerged that the Centre does not plan to extend the FAME-II scheme once its deadline ends in FY24, EV OEMs have sought further extension. A few days back, a parliamentary panel on EVs also recommended extending the phase II of the scheme. 

While hectic developments are underway in the segment, the adoption of EVs is on the rise in the country. Two-wheeler EV registrations in the country grew nearly 30% month-on-month (MoM) to 85,683 units in March.