India stands at the threshold of a major green revolution, with electric vehicles set to play a pivotal role in reducing the country’s carbon footprint. The rapid adoption of EVs is not just an environmental necessity, but an economic imperative, creating new opportunities in manufacturing, logistics, and sustainable transport. In 2024, till date (January to October) about 1.2 lakhs electric three-wheeler vehicles have been sold, more than doubling from ~57,000 figure in the same duration in 2023. The market is witnessing a swift adoption of EVs, particularly in the three-wheeler segment. EV sales as a percentage of overall three-wheeler sales have increased from about 12% in 2023 (January to October) to over 21% in 2024 during the same period. But as promising as this growth is, the full potential of India’s EV revolution remains largely untapped, especially among underserved communities who face high upfront costs and a lack of accessible financing.
This is where Global Climate Finance Organisations (GCFOs) step in, with the power to unlock these barriers and drive inclusive EV adoption. By providing not just funding, but strategic, targeted support, these organisations are uniquely positioned to accelerate India’s transition to electric mobility and ensure its benefits reach all sections of society.
Bridging the Gap: Tailored Solutions for Inclusive EV Adoption
The true success of India’s EV journey hinges on making these vehicles accessible to everyone, particularly the underserved demographics who form the backbone of small and light commercial vehicle use. For many, electric three-wheelers are more than just transport—they’re a livelihood, offering lower maintenance and operational costs that can significantly boost income. However, the roadblock remains: high interest rates, limited financing options, and lenders’ hesitance to offer attractive loan-to-value ratios for these buyers.
Global climate finance organisations can work alongside local financial institutions to bridge this gap, crafting solutions that cater to the unique needs of potential EV buyers. A prime example is the Green Growth Equity Fund (GGEF) in India, supported by the Green Climate Fund (GCF), which has successfully mobilized over USD 800 million for low-carbon transport and green infrastructure projects in India. Such initiatives are more than financial interventions—they’re transformative models that pave the way for inclusive EV financing that can be replicated across the country.
Another example is the broader impact of this programme, which is India’s first of its kind climate-focused fund. It invests in low-carbon and climate-resilient platforms across the energy value chain, including renewable energy generation, energy-efficient technologies, low-carbon transport, and resource conservation. By providing equity and grants, the programme accelerates the uptake of Indian green infrastructure projects, addressing the challenges faced by underserved communities in adopting EVs.
Global Models, Local Impact: Lessons from International Success Stories
The power of global climate finance goes beyond providing capital—it’s about creating ecosystems where sustainable technology can thrive. A compelling case is CGAP (Consultative Group to Assist the Poor), an independent think tank housed at the World Bank, which has demonstrated how global finance can fuel local change. By partnering with over 30 development organisations, CGAP helps advance financial inclusion for underserved populations, particularly women, by tailoring financial services that address the unique challenges they face.
CGAP’s impact lies in its approach: not only identifying barriers to inclusion but driving innovative solutions to overcome them. The organisation’s partnerships with governments and financial institutions foster policies that ensure safe, sustainable, and equitable financial services. This model provides a blueprint for how climate finance can make EV adoption more accessible to marginalized communities in India.
Building India’s EV Ecosystem: The Role of Climate Finance
Direct investment into India’s EV ecosystem, particularly in vehicle financing, could significantly boost the pace and scale of adoption. GCFOs have a critical role to play by offering concessional loans, investment guarantees to mitigate risks, and partnerships with local banks to create tailored financial products for underserved populations. By targeting the economically vulnerable, these mechanisms ensure that even those at the bottom of the financial ladder can participate in the EV revolution.
In addition to environmental benefits, investments in EVs are an engine for economic growth—spurring job creation, increasing revenue for individuals, and fostering innovation. With the right financial products in place, India can bridge the existing gaps and drive widespread EV adoption, ensuring a truly equitable green transition.
Collaboration is Key: A Collective Push for a Greener Future
The scale of India’s EV ambition cannot be achieved in isolation. According to McKinsey, developing countries face a significant climate financing gap, with an additional $2 trillion needed annually by 2030 to meet the Paris Agreement goals. For India, this means that international funds must play a crucial role in financing the transition to EVs, particularly in ensuring that underserved communities are not left behind in this green transition.
Climate finance is more than just an economic tool—it’s a catalyst for a sustainable, inclusive future. The commitment of global financiers to India’s EV transition can create a development model where economic growth and environmental conservation are inextricably linked. By investing in India’s EV ecosystem, global climate finance organisations can spark the change needed for a greener, more equitable world, demonstrating that the road to sustainability is a road to prosperity for all.
By Rohit Gattani, VP – Growth & Vehicle Financing, Euler Motors
