NITI Aayog, RMI India release report of financing India’s EV’s transition
March 20, 2021 12:37 pm
NITI Aayog and Rocky Mountain Institute (RMI) India released a new report ‘Mobilising Electric Vehicle Financing in India’, which highlights the role of finance in India’s transition to electric vehicles (EVs) and analyses that the transition will require a cumulative capital investment of $266 billion (₹19.7 lakh crore) in EVs, charging infrastructure, and batteries over the next decade.
The report also identifies a market size of $50 billion ($3.7 lakh crore) for financing EVs in 2030. Presently, about 80 percent of the current size of India’s retail vehicle finance industry is worth $60 billion (₹4.5 lakh crore). “The need of the hour is to mobilise capital and finance towards EV assets and infrastructure,” said Amitabh Kant, CEO, NITI Aayog. “As we work towards accelerating the domestic adoption of EVs and push for globally competitive manufacturing of EVs and components like advance cell chemistry batteries, we need banks and other financiers to lower the cost and increase the flow of capital for electric vehicles.”
India’s EV ecosystem has thus far focused on overcoming adoption hurdles associated with technology cost, infrastructure availability, and consumer behavior. Financing is the next critical barrier that needs to be addressed to accelerate India’s electric mobility transition.
End-users currently face several challenges, such as 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 financial institutions such as banks and non-banking financial companies (NBFCs) as well as the industry and government can adopt in catalysing the required capital.
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