Funding electric vehicles in India is a big challenge, know what the CII report says
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New Delhi : Electric vehicles are being promoted in India to reduce air pollution, but making and selling it in the market is proving to be very expensive. Electric vehicles are being sold in the market at much costlier prices than vehicles running on conventional fuel, petrol and diesel. Subsidy is also given by the government to buy it, while financial assistance is also being provided by the government for its construction through a special scheme for entrepreneurs. Nevertheless, it is being said that funding of electric vehicles in India remains a major challenge.
Alternatives needed to bring down construction costs and prices
A report released on Monday by the Confederation of Indian Industry (CII) said that financing for electric vehicles in India remains a challenge. In such a situation, it is imperative to introduce an alternative that can help bring down the manufacturing cost and bring Electric Vehicles (EVs) at par with conventional Internal Combustion Engine (ICE) vehicles in cost and price. This report prepared in collaboration with OMI is a part of a series of reports on ‘Roadmap for Future Mobility 2030’. The report also called for the introduction of a ‘scrap’ policy, based on the need to scrap end-of-life vehicles (ELVs).
Rs 19.7 lakh crore needed for charging points and batteries
Let us tell that on March 9, 2009, a report on financing for electric vehicles in India was also released by NITI Aayog and Rocky Mountain Institute (RMI) India. It has been analyzed in this report that to set up charging points for electric vehicles in India, a cumulative capital investment of $ 266 billion (Rs 19.7 lakh crore) is required over the next decade.
Rs 3.7 lakh crore needed for funding by 2030
A report by NITI Aayog and Rocky Mountain Institute India has identified a $50 billion (Rs 3.7 lakh crore) market for financing electric vehicles in 2030, which is over 80 per cent of the current size of India’s retail vehicle financing industry. is more. India’s current retail vehicle financing industry is worth $60 billion (Rs 4.5 lakh crore).
what is the challenge
India’s electronic vehicle ecosystem has yet to overcome the technical cost, infrastructure availability and consumer sector barriers. Right now users are facing a lot of challenges. These challenges include 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 can be adopted by industry and government along with banks and non-banking financial companies (NBFCs) to raise the required capital.
Claims to finance 20 lakh vehicles in five years
According to a report presented on March 23, 2023, RevFin Services, a digital platform providing finance for electric vehicles, has claimed that India has a target of financing 20 lakh vehicles in the next five years. The company intends to achieve three to four times growth every year. The company’s Chief Executive Officer (CEO) and founder Sameer Agarwal said the Indian electric vehicle industry is poised for rapid growth. The company is confident of meeting its target and will continue to raise funds through debt and equity for the purpose. From a long-term perspective, we have taken a very strong position on EVs and are committed to funding 2 million electric vehicles over the next five years, Agarwal said.
Loan disbursement at the rate of 15%
Sameer Agarwal, CEO of RevFin Services, said that the monthly disbursement rate is increasing at a rate of around 15 per cent on a monthly basis. It has quadrupled in the last one year. If we keep moving forward like this, we will achieve this goal. The company intends to provide financing for 50,000 electric vehicles in 2023-24. In the last 51 months, the company has provided finance for 17,118 electric vehicles.
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