TVS Motor Company has announced a refund scheme worth ₹20 crore ($2.7 million). This will benefit customers of the TVS iQube electric scooter, who allegedly had to pay an additional cost for the vehicle’s charger due to a loophole in the FAME II policy. Under the scheme customers who had paid over INR 1.5 lakh ($2,000) for the scooter including the extra cost of the charger will be refunded. This is a noble gesture by TVS Motor which is one among the several electric two-wheeler companies that have been accused of capitalizing on the loophole. This move has much appreciated by customers as it will bring down the asking price of the scooter previously over INR 1.5 lakh (ex-factory).
Policy compliance issue
A recent investigation conducted by the Ministry of Heavy Industries has revealed a startling discovery that electric two-wheeler manufacturers were charging an extra amount for off-board chargers instead of including them as part of the purchase of the scooter and pushing the asking price beyond the Rs 1.5 lakh ex-factory limit and making them ineligible for subsidies under FAME-II. According to whistleblower emails, TVS Motor Company was named alongside Hero MotoCorp, Ola Electric and Ather Energy as companies engaging in this practice. As a result, all four brands had been excluding the portable charger from the scooter’s ex-showroom cost in order to keep the price within the Rs 1.50 lakh ex-factory limit and be eligible for subsidies.
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Refund scheme details
TVS Motor Company’s KN Radhakrishnan has announced a refund to cover the additional cost customers had to pay for chargers purchased separately. The move comes after the company was found to have exploited a loophole within the FAME II policy. The estimated reimbursement cost to TVS is estimated to be around INR 15-16 crore ($2-2.1 million) and Radhakrishnan has stated that the overall cost impact to the company is less than INR 20 crore. He went on to explain that the company has followed all government regulations under FAME and the goodwill benefit scheme is being offered to customers who paid more than the threshold limit.
Other companies’ responses
Amidst the pandemic a number of companies have announced refunds to customers. Ather Energy and Vida have recently declared that they will be refunding their customers. Reports have also surfaced that Ola Electric has committed to refunding a whopping INR 130 crore ($17.5 million). To add to this Hero MotoCorp has confirmed that it will be reimbursing the buyers of Vida V1 and simultaneously slashing the prices of the e-scooter.
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Impact on TVS iQube buyers
Buyers of the TVS iQube electric scooter recently got a surprise when they had to pay an extra INR 9,450 ($127) for the portable charger. This raised the on-road price of the scooter, but it still stayed below the INR 1.5 lakh mark in most places. However, TVS is only refunding the difference between the original and the revised price, which works out to be around INR 1,700 ($23) per scooter. And although TVS has yet to officially announce an updated price for the iQube with the charger included, it’s likely the cost of the charger will be factored in from now on. So, while customers had to bear an extra cost initially, the refund amount is the lowest among all OEM players.
