Deciphering the central role of finance in the adoption of electric vehicles in India

While the absence of the entire EV ecosystem remains a major hurdle for the segment, the reluctance of automotive financiers to offer EV loans is also a significant challenge for the industry.

Electric vehicles (EVs) are seen as the most viable solution to reducing carbon footprint and reliance on fossil fuels worldwide and rightly so. In recent years, India has witnessed a slew of electric vehicle launches ranging from scooters to SUVs by automotive giants as well as innovative startups.

According to the Society of Manufacturers of Electric Vehicles (SMEV), the registered association that represents electric vehicle manufacturers in India, the sale of electric vehicles in India is expected to hit one million units in the current year.

This is an almost five-fold increase compared to the sales figure for electric vehicles in 2021 which stood at 2,33,971. Citing an encouraging response from consumers, the Indian government has also tripled the budget for subsidies under the Faster Adoption and Manufacture of Hybrid and Electric Vehicles (FAME II) program for the financial year 2023. The subsidy for the year is expected to reach Rs 2,908 crore compared to Rs 800 crore for the financial year 2021.

State governments across the country are also offering additional grants ranging from Rs 5,000 to Rs 30,000 to potential buyers of electric vehicles to foster the adoption of electric vehicles in India.

Initial financial challenges for the electric vehicle industry

Despite the optimistic figures, electric vehicles are still not mainstream in India due to many bottlenecks. While the absence of the entire EV ecosystem remains a major hurdle for the segment, the reluctance of automotive financiers to offer EV loans is also a significant challenge for the industry.

According to Mr. Sohinder S Gill, Managing Director of the Society of Manufacturers of Electric Vehicles (SMEV), only 9% of electric two-wheelers are financed in India. This can be attributed to the birth of electric vehicle technology and its adoption, which prevent banks and non-bank financial companies (NBFCs) from lending due to asset and business model risks.

Low financial institution confidence in EV financing also results in high interest rates, low loan-to-value ratio resulting in high down payment, short loan terms compared to conventional vehicles, and limited financing options for buyers of electric vehicles.

How FINAYO overcomes persistent financial challenges

FINAYO’s industry-leading platform leverages machine learning and artificial intelligence to assess client risk and asset valuation, including real-time coin shelf life, and inspire confidence in lenders to offer ready for electric vehicles. The SaaS-based platform also offers loans tailored to an individual’s profile, allowing the potential customer to choose from several options.

FINAYO’s disruptive AI-powered platforms, including Asset Business Rule Engine and Lender Business Rule Engine, enable OEMs and lenders to deliver attractive loan offers to consumers for a convenient shopping experience.


FINAYO’s revolutionary FI-MEN solution allows a potential EV buyer to benefit from a multitude of real-time loan offers for their favorite electric vehicle by simply scanning a QR code. FINAYO has collaborated with several electric vehicle showrooms in this regard and consumers can benefit from the loan offers after filling in loan-specific details.

The solution demonstrates FINAYO’s goal of alleviating the challenges associated with lending in the electric vehicle sector.

Another key benefit of FINAYO’s platform includes better customer acquisition for lenders and EV manufacturers, as it bridges the gap between financial institutions and EV buyers considering a one-time financing option. real.

As the Indian government pledges its support to drastically reduce carbon emissions and increasingly rely on renewable sources at the COP 26 summit, a host of encouraging new policies to further propel the adoption of electric vehicles in India are expected in the coming times.

The country’s top policy think tank, NITI Aayog, will also establish a $300 million first-loss risk-sharing instrument with the World Bank. The instrument will serve as a guarantee mechanism for banks and NBFCs in case of late payment on EV loans.

In such a scenario, cutting-edge SaaS platforms such as FINAYO will play an active role in providing consumers with instant and hassle-free financing options within minutes. The automated platform leveraging advanced technology will also expand opportunities and incentives for all segments of EV buyers in India.

Commenting on FINAYO’s commitment to propel the adoption of electric vehicles in the country, Mr. Brajendra Singh Tomar, Founder and CEO, said, “After extensive research into the electric vehicle financing space, the knowledgeable team from FINAYO identified the main challenges lurking in the field and exploited the cut. advanced AI-powered technologies to develop FI-MEN. The industry-leading FI-MEN solution includes the first asset business rules engine for OEMs and lender business rules engine for banks and NBFCs to provide competitive lending offers to potential buyers electric vehicles conveniently and quickly. ”

“Our team at FINAYO is committed to investing in cutting-edge technologies to facilitate the EV lending process and contribute to the Government of India’s ambitious initiative to become a 100% EV nation by 2030,” Mr. Tomar added. .

With a firm commitment to increase the adoption of electric vehicles across the globe, FINAYO will soon enter markets in Southeast Asian regions to replicate its success story in India.

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