According to a report by the Confederation of Indian Industry (CII) in collaboration with OMI, electric mobility faces challenges in vehicle financing in India. The report suggests the importance of presenting options that can bridge the cost gap between electric vehicles (EVs) and internal combustion engine models.
To unlock the benefits of mobility-as-a-service (Maas), the report highlights the need for clarity on issues like bike taxis and their classification as commercial vehicles. Emphasizing the advantages of bike taxis in terms of decongestion and affordability can encourage their popularity among users and provide more choices to consumers, promoting shared mobility.
The report acknowledges that vehicle financing remains a significant hurdle for electric mobility and recommends options to make EVs more cost-competitive with contemporary internal combustion engines. It also advocates for the introduction of a scrappage policy to remove end-of-life vehicles (ELVs).
In addition, the report proposes a scheme to offer additional incentives for commercial vehicles transitioning to electric vehicles. This approach can help reduce the principal amount on new vehicles and subsequently lower the interest quantum to be paid out by the vehicle partner.
Furthermore, the report suggests creating a ‘first loss fund’ mechanism to facilitate increased lending for electric vehicle purchases. This mechanism aims to support the growth of EV adoption by reducing risks and encouraging financial institutions to provide more funding for EV buyers.