The Union transport ministry is spearheading the drive to get this industry a priority sector tag from the Reserve Bank of India (RBI). Sources indicate that the industry could get a preferred financing status in the next six months.
Several fintech companies – Rev Fin, Oto Capital and Three Wheels United – have taken the lead in financing EVs. These fincompanies have seen volumes jump at least 5- 8 times since mobility curbs were eased, officials say.
“More than 85% of our customers have never taken a loan and have no credit record,” said Sameer Aggarwal, founder of RevFin Services, a digital lending platform. “It is that much more difficult to underwrite such customers. Yet, through the use of biometrics and psychometric parameters, we study each customer’s personality and repayment patterns. We are seeing lower NPAs.”
Fintech companies co-lend with banks, offer innovative financing schemes such as flexibility to customers to opt out of EVs within 12-24 months of purchase and lower EMIs due to attractive interest rates. “As more and more fintech companies underwrite assets, we have started playing a bigger role in EV financing, especially in the retail personal sector, where the defaults can be lesser,” said Sumit Chhazed, co-founder, OTO Capital. We have financed 3,000 EVs in FY22 as against 200 in FY21, he said.
In the meantime, the EV financing industry is likely to get a preferred status of priority sector over the next 3-6 months, said two people close to the development.
Government sources indicated that work is in full swing in this regard with transport minister Nitin Gadkari leading the initiative.
The inclusion of EVs under
will not only reduce cost of finance but also provide finance to more people, thus increasing penetration of EVs in India, a move that will help cut imports of fossil fuels as well. Sources close to the central bank indicated that the matter was under active consideration.
Non-bank lenders, including
, Shriram Citi Union, Mahindra Finance, , L&T Finance and banks like have begun financing EVs.
This, experts believe, is a welcome change as until recently banks and NBFCs focused on financing conventional vehicles.
These lenders expect electric vehicles to trigger new activity in the market and boost demand for loans. Having financing options will make these vehicles more affordable and help attract cost-conscious rural buyers, say experts.
“With the basic EV policy in place, now the focus areas that are being stepped up are charging infrastructure, battery swapping, financing etc,” said Sulajja Firodia Motwani, chief executive of electric two- and three-wheeler maker Kinetic Green Energy & Power Solutions, which has tied up with RevFin.