India is looking at a transition of its vehicles towards Electric Vehicles. According to a report released by NITI Aayog and Rocky Mountain Institute (RMI), India’s transition towards Electric Vehicles will require a capital investment of 266 billion dollars in Electric Vehicles, charging infrastructure and batteries over the next ten years.
The report also identifies a market size of $50 billion (3.7 lakh crore) for the financing of EVs in 2030, about 80 per cent of the current size of
India’s retail vehicle finance industry which is worth $60 billion.
“The need of the hour is to mobilize capital and finance towards EV assets and infrastructure,” said Amitabh Kant, CEO, NITI Aayog. “As we work towards accelerating the domestic adoption of EVs and push for globally competitive manufacturing of EVs and components like advance cell chemistry batteries, we need banks and other financiers to lower the cost and increase the flow of capital for electric vehicles.”
India’s EV ecosystem has thus far focused on overcoming adoption hurdles associated with technology cost, infrastructure availability, and consumer behavior. Financing is the next critical barrier that needs to be addressed to accelerate India’s electric mobility transition, according to Hindustan Times.
End-users currently face several challenges, such as high interest rates, high insurance rates, and low loan-to-value ratios. To address these challenges, NITI Aayog and RMI have identified a toolkit of 10 solutions that financial institutions such as banks and non-banking financial companies (NBFCs), as well as the industry and government can adopt in catalyzing the required capital.
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