Boosting EV Financing: A Call for Incentives in India

Non-bank lenders in India have proposed a new scheme to incentivize electric vehicle (EV) financing, highlighting financing as a key hurdle. They urge the government to support EV financiers similar to how it aids EV manufacturing, suggesting a dedicated fund and subsidized interest rates.

Non-bank lenders in India are pushing for the introduction of an incentive scheme tailored for electric vehicle (EV) financing. Echoing existing initiatives like FAME and production-linked incentives that bolster EV manufacturing, they emphasize the critical role of financing in accelerating the shift to electric mobility.

In a meeting with Niti Aayog, the Finance Industry Development Council (FIDC) identified EV financing as a 'bottleneck' in achieving national decarbonization targets. They noted that unlike EV manufacturing, financing lacks specific government support, which hinders progress.

The FIDC suggests establishing a fund with SIDBI or NABARD to aid NBFCs in lending for EVs, alongside proposals for reduced interest rates on loans under Rs 10 lakh. The group highlighted concerns about technological advancements and battery depreciation risks, seeking standardized assessments and resale strategies.