EV Financing In India: Getting Ready For Big Growth

white car charging
Photo by Rathaphon Nanthapreecha on Pexels.com

Although electric vehicles (EVs) have been around for a long time, the pace of innovation and interest in the field has increased dramatically in the last year. The Indian automotive industry has also taken the first steps towards an autonomous tomorrow. With the right combination of hype and incentives, electric vehicles could become more common in the time to come. There was a period when there were doubts about the viability of autonomous and electric vehicles in India, especially given the lack of infrastructure and favourable policies. However, things seem to be quickly shifting now. The year 2021 appears to be the year when the demand for autonomous vehicles and electric vehicles will begin to surge. Despite the fact that autonomous and electric vehicles have a limited market share in India, the government is investing heavily in the field.

India And The Road To Electric Mobility 

India has made a significant investment in the sector of electric vehicles. The country’s transition towards an autonomous tomorrow is gaining traction because of increased demand for electric mobility, enhanced EV policies, and domestic manufacturing of electric vehicles. According to a report by India Energy Storage Alliance (IESA), the electric vehicle (EV) market in India is projected to cross over 63 lakh units per year by 2027. According to the findings of this study which examines the current state and future prospects of the electric vehicle (EV), EV batteries, and public charging infrastructure markets in the region highlights that the demand for batteries will increase significantly over the same time span.

In accordance to a new estimate, India’s electric vehicle (EV) financing industry will be worth Rs 3.7 lakh crore in 2030, accounting for around 80% of the existing retail vehicle finance industry. As stated by a report prepared by Niti Aayog and Rocky Mountain Institute, over the next decade, India’s transition to electric vehicles (EVs) would necessitate a total capital investment of USD 266 billion which is rounded off to be Rs 19.7 lakh crore in EVs, charging infrastructure, and EV batteries.

In 2019-20, India’s electric vehicle sales totaled 3.8 lakh units, with the EV battery demand totaling 5.4GWh. Last fiscal year, electric two-wheelers were the most common in the entire segment. Low and medium-speed electric two-wheelers (up to 40 kmph) with traditional lead-acid batteries dominated the market. The statistics clearly make a strong statement that the future of vehicles in India is going to be autonomous and electrically mobilized.

The Future

In a major push for the industry, Nitin Gadkari, the union minister for road, transport, and highways, announced in November 2020 that the government will install at least one electric vehicle charging kiosk at each of the country’s 69,000 gas stations. The National Electric Mobility Mission Plan (NEMMP), the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) Scheme, loan subventions, and income tax rebates, as well as similar state-level relaxations, have all been proposed by the government. More state governments are offering incentives to allow people to turn to electric cars. At the same time, we are seeing an increase in the number of players in the market. 

With the recent buzz surrounding Tesla’s plans to open a manufacturing facility in the region, the sector has gained new vigour. Low-cost funding is a major impediment to the segment’s expansion. Moving forward, the industry expects the market to develop rapidly in the coming years, as several state governments intend to switch their current fleets of vehicles to electric vehicles as part of their EV policies. Many new markets, such as Raipur, Indore, and Bhopal, opened last year, indicating that the electric e-rickshaw industry is primed for growth in the coming years. In addition, the markets in the South and North East are expected to open in the coming years.

In line with the Make in India initiatives and global supply chain requirements, the government is pushing hard for manufacturing to be pushed closer to home in order to achieve the twin goals of self-sufficiency and job development. This will open up opportunities for infrastructure development across the entire EV supply chain, including charging and battery manufacturing. In collaboration with other ministries, Niti Aayog aims to develop a phased manufacturing strategy for a few large-scale export-competitive integrated battery and cell manufacturing gigs in India. The government intends to issue tenders to companies interested in establishing a 50-GW battery manufacturing base in India.


Cleaner and faster transportation is the future of autonomous and electric vehicles. This also speeds up the much required reductions in emission of green-house gases in the transportation sector. In a country like India, where oil imports are heavily subsidized and pollution is a major issue, autonomous vehicles and electric vehicles provide a one-stop solution to two major issues. Investing in India’s transition to electric mobility has the potential to help the country economically, socially, and environmentally.

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