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  • 11 March, 2021

  • 5 Min Read

Mobilising Electric Vehicle Financing in India Report by NITI Aayog

NITI Aayog and Rocky Mountain Institute(RMI) India jointly releases a new report titled ‘Mobilising Electric Vehicle Financing in India’.


  • The report highlights the role of finance in India’s transition to electric vehicles(EVs).
  • Further, the report also identifies solutions for capital and financing to aid in India’s EV transition.

What does the report say about Electric Vehicle Financing?

  • India’s Electric Vehicle ecosystem has so far focused on overcoming adoption hurdles.
  • These hurdles are associated with technology cost, infrastructure availability, and consumer behaviour.
  • However, financing is the next critical barrier that needs to be addressed to accelerate India’s electric mobility transition.

According to the report, the transition to Electric Vehicles(EVs) will require a capital investment of over Rs 19 lakh crore .

This has to be spent on electric vehicles, charging infrastructure, and batteries over the next decade.

  • Moreover, India’s Electric Vehicle financing industry is projected to be Rs 3.7 lakh Crore in 2030. It is about 80% of the current size of India’s retail vehicle finance industry.

Suggestions: The report has provided several solutions that financial institutions can adopt in catalysing Electric Vehicle financing.

  • Inclusion of EVs in Priority sector lending
  • Interest rate subvention
  • Product guarantees and warranties: The manufacturers of EVs can provide guarantees and warranties on the performance of their products.
  • Risk-sharing mechanism (government and multilateral-led): Partly or entirely covering the possible losses associated with Electric Vehicle financing can build trust in the sector.
  • Secondary market development: Government can help develop a secondary market for electric vehicles.
    • This will improve the resale value of EVs and improve their bankability.
  • Digital lending: The loans for EVs can be provided digitally. This will help in overcoming the operational and logistical challenges of Electric Vehicle financing.
  • Open data repository for EVs: Financial Institutions(FIs) need access to data on EV specifications, actual charging costs, and operating expenditures.
    • This will help institutions accurately assess risk, determine appropriate interest rates, and design effective leasing programmes.

Source: TH

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