NITI Aayog and the Rocky Mountain Institute (RMI) India have released a new report ‘Mobilizing Electric Vehicle Finance in India’, which highlights the role of finance in India’s transition to electric vehicles (EVs). ) and analyzes that the transition will require a cumulative capital investment of 266 billion USD (Rs 19.7 lakh crore) in electric vehicles, charging infrastructure and batteries over the next decade.

The report also identifies a market size of USD 50 billion (Rs 3.7 lakh crore) for electric vehicle financing in 2030, roughly 80% of the current size of India’s retail vehicle financing industry, of a worth 60 billion USD (4.5 lakh Rs crore) today. .

“The need at the moment is to mobilize capital and finance for VE assets and infrastructure,” said Amitabh Kant, CEO of NITI Aayog. “As we strive to accelerate the national adoption of electric vehicles and promote globally competitive manufacturing of electric vehicles and components such as advanced cell chemistry batteries, we need banks and other financiers to reduce costs and increase the flow of capital for electric vehicles. “

India’s EV ecosystem has so far focused on addressing barriers to adoption related to technology cost, infrastructure availability and consumer behavior. Funding is the next critical hurdle that needs to be overcome to accelerate the electric mobility transition in India.

End users are currently facing 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-bank financial corporations (NBFCs), as well as industry and government, can adopt to catalyze the capital required.

“Reengineering vehicle finance and mobilizing public and private capital will be key to accelerating the deployment of the 50 million electric vehicles that could be on Indian roads by 2030,” said Clay Stranger, senior manager of Rocky Mountain Institute. “These solutions represent high leverage areas for interventions in finance, and we believe many are relevant beyond India.”

The 10 solutions recommended in the report include financial instruments such as priority sector loans and interest subsidies. Others relate to creating better partnerships between OEMs and financial institutions by providing product guarantees and guarantees. In addition, a developed and formal aftermarket can improve the resale value of electric vehicles and improve their bankability. “The obstacles identified in the financing of electric vehicles must be tackled in a structured way with innovative financing models,” said Randheer Singh, senior specialist at NITI Aayog.

Beyond finance, recommendations include digital lending, business model innovation, fleet and aggregator electrification goals, and the creation of an open data repository for electric vehicles.

The report further determines that investing in India’s transition to electric mobility has the potential to create significant economic, social and environmental benefits for the country. As the electric vehicle economy continues to improve, new business models and financing instruments are accepted, and government programs foster their early adoption and encourage domestic manufacturing, India’s electric vehicle market is poised to be. to grow over the next decade.

(With inputs from GDP)

Leave a Reply

Your email address will not be published.