In electric three-wheeler segment, 90% buyers seek financing

Electric vehicle (EV) finance is a niche but growing segment in India. It is different from regular car or bike loans because banks haven’t yet entered this space in a big way. Some NBFCs, however, are serving this segment, such as Akasa Finance Ltd. Its executive director Tanesh Gagnani told FE’s Vikram Chaudhary that, in the electric three-wheeler segment, at least 90% of buyers seek financing.

In electric three-wheeler segment, 90% buyers seek financing

Interview: Tanesh Gagnani, Executive Director, Akasa Finance Ltd

How big is the electric vehicle (EV) financing opportunity in India?
In the last six months, about 60,000 electric vehicles (EVs) got registered in India every month. These are mostly electric two-wheelers and three-wheelers. With respect to financing opportunity, it is the electric three-wheeler segment where at least 90% of buyers seek financing. The percentage of customers seeking loans for electric two-wheelers is less than 20%.

When did structured EV financing start in India?
It is still in the development phase; not many NBFCs are entering the electric three-wheeler space, which has huge demand and potential for finance. EV financing is available in few geographical territories and that too by smaller NBFCs.

In addition to NBFCs, how many start-ups are involved in EV financing in India?
There are a few of them, but they have very limited funding capacity and do not hold significant market share.

Where do you get the money from to lend to people?
Our major lenders are banks, NBFCs and corporates.

Who generally approaches EV financers like yours? Is it predominantly individual EV operators or is it EV start-ups?
Mostly it is e-rickshaw manufacturers and dealers who approach us with an aim to increase their sales.

In the case of individual EV operators, are they digitally literate enough to contact financers like yours and take an informed decision?
EV operators obviously understand the nuances of financing as it is a business for them.

Do you also offer loans to those who want to set up EV charging stations (as this may be the next big thing)?
No, we have not started that yet.

What is the average ticket size of your loans?
It is about Rs 1.5 lakh.

Do you also educate EV operators on what kind of subsidies they can avail of in their state/city?
That is the responsibility of dealers and manufacturers, to help their customers avail subsidies, if any.

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