Electronic Vehicles (EVs) are dramatically changing the transportation scene in India, offering a sustainable solution to the global automotive industry’s environmental challenges. With the harmful effects of fossil fuels on the environment becoming apparent, countries globally are implementing the idea of green mobility.
India, once a novice in the EV segment, has evolved into one of the world’s largest EV markets. This transformation has led to noteworthy progress in manufacturing, the export of EVs, and sales in the country. Remarkably, the rise of EV Non-Banking Financial Companies (NBFCs) has significantly influenced India’s green mobility revolution.
As per a study conducted by the CEEW Centre for Energy Finance (CEEW-CEF), India’s EV market is forecast to be valued at US$206 billion by 2030. The CEEW-CEF report also highlights the country’s resolute vision of e-mobility, targeting 70 per cent of all commercial cars, 30 per cent of private cars, 40 per cent of buses, and 80 per cent of two-wheeler and three-wheeler sales as electric vehicles by 2030. This translates into an astounding 102 million EVs on Indian roads.
The report further accentuates the potential adoption scenarios for EVs in India. Under the high adoption situation, where EV adoption exceeds the vision targets by 10 per cent, EVs are expected to account for 43 per cent of total new vehicle sales. Even in the low adoption state, EVs are projected to make up 23 per cent of total new vehicle sales despite a 40 per cent shortfall from the vision.
NBFCs are playing a major role
To help increase the pace of EV adoption, financial institutions in India have a crucial role to play. A report by NITI Aayog, Rocky Mountain Institute (RMI), and RMI India titled “Banking for Electric Vehicles in India,” indicates the noteworthy role of banks and non-banking financial firms (NBFCs) in determining the EV landscape. It anticipates that Indian banks and NBFCs might have a market size of approximately Rs 40,000 crore (USD 5 billion) by 2025, for EV financing and Rs 3.7 lakh crore (USD 50 billion) for overall EV investments.
Electric Vehicle (EV) Non-Banking Financial Companies (NBFCs) are spearheading the green mobility revolution in India. They are reshaping the financial landscape for EVs by leveraging data-driven strategies and capturing the first-mover advantage. By tapping into this uncharted territory, they are not only facilitating easier access to financing for electric vehicles but also fostering the growth of sustainable transportation solutions across the country, driving India closer to a greener and cleaner future.
EV NBFCs are crafting specific financial products and loan packages tailored explicitly for EV buyers. These tailored offerings consider factors such as the reduced operating costs of EVs compared to conventional vehicles and the potential for savings over time. Such tailor-made financing options make it more attractive and affordable for consumers to make the switch to electric vehicles.
Furthermore, EV NBFCs are also emphasizing investing in EV charging infrastructure. Recognizing the importance of a strong charging network to support widespread EV adoption, these NBFCs are extending their financial support to set up charging stations across India. This strategic investment helps address one of the key concerns of potential EV buyers: range anxiety.
Besides, green initiatives are gaining impetus globally, and EV NBFCs are contributing to sustainability by financing environmentally friendly transportation options. By encouraging consumers and businesses to opt for EVs, they are actively promoting a cleaner and greener future for India.
Today, EV NBFCs are forming strategic alliances with EV manufacturers, dealers, and other stakeholders in the ecosystem to create a seamless and efficient EV buying experience. Such collaborations streamline the financing process and enhance customer convenience, further inspiring the adoption of electric vehicles.
Therefore, the rise of EV NBFCs plays a pivotal role in propelling the green mobility revolution in the country.
Shared by : Nehal Gupta,
AMU Leasing
