The main emphasis of the Indian government right now is on the localization of the production of electric vehicles (EVs), and in this process, financing the projects has become one of the biggest hurdles. Vinit Bansal, the CEO and founder of EV Motors India, said that “The upfront costs are very high, and thus financial re-engineering is significant for e-mobility,” at the EVCon India conference. He believes that the “banks and financial institutions have a big role to play” as innovation in the e-mobile sector would be challenging in India without the support of the financial institutions. Bansal’s firm manufactures and operates charging stations for Electronic Vehicles. He also addressed issues that have to be dealt with in order to improve mass preference for electric vehicles.
While moderating a panel during the conference, the partner and leader at PwC, Kavan Mukhtyar, too said that “the key to the puzzle (expanding Electronic Vehicle fleet) lies” in resolving financial obstacles. He went on to add that apart from financial restructuring, business model renovation can also prove successful in addressing the financial problems. According to Mukhtyar, the problem can be solved through shared mobility space. It can increase attainibility as the volumes will grow, and the prices will fall. This will result in electric vehicle adoption among users. Vineet J. Mehra, the founder of DOT, a logistics provider that uses electric vehicles for transport, believes that while investment and funding in the electronic vehicle industry is picking up speed in India, banks still need to step up further. Recently, Electronic Vehicle mobility start-up BluSmart raised around $3 million from KA Enterprises, Kalpavriksh Trust (Centrum VC Fund), JITO Angel Network, Survam Partners, the family office of Hero Group’s Suman Kant Munjal and several others.
Banks are also taking charge of initiatives in the green mobility business. Recently, State Bank of India reduced the rates of auto loans for Electric Vehicles. The buyers were provided with a discount of 20 basis points on the interest paid on loan. Moreover, the loan repayment period is also stretched longer under this scheme.
Vignesh Nandakumar, a partner at Lightstone Aspada, explained that vehicle loan business in India is one of the largest markets. He reasoned, saying that this is because users understand the demand for vehicles. While speaking at the event, he also said that the government needs to consider its role in that front. He added that government subsidies should be made available to both consumers and manufacturers to boost Electronic Vehicle adoption in India.