EV DEMAND-SIDE FINANCING IN THE INDIAN CONTEXT

The Indian electric vehicle (EV) space primarily includes two-, three- and four-wheelers. Demand side-financing is a key aspect of the domestic automotive segment, including EVs. However, there are certain challenges facing demand-side financing that need to be addressed for the effective adoption of EVs in India. These include risky customer profile, resale value not established in the market, low confidence in the product, technology-related risks and absence of infrastructure, among others. Currently, PSBs and NBFCs account for most of the financing for EVs, with limited participation of PVBs. Financial institutions are working to address these risks, such as the World Bank tying up with SBI. Likewise, proactive efforts by OEMs as well as government support could also help alleviate the concerns. These concerted efforts would help increase confidence in the product and improve the viability of business models in the EV ecosystem in India.

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