Inadequate charging infrastructure, reliance on battery imports, range anxiety and high prices are not the only problems in India’s electric vehicles (EV) industry. Financing these cars isn’t too easy either. At the core is viability — and volumes. Financiers said electric car sales must show up sufficiently on the dashboard for them to build a viable finance plan.
For the personal buyer, car prices range anywhere between Rs 12 lakh and Rs 20 lakh. Financiers believe that the consumer would default because of the high prices, making it difficult for them to sell the attached vehicle.
Ashok Khanna, head, auto finance, HDFC Bank, is a veteran in the motor financing space. “Our bank will finance as and when vehicles are introduced. However, we have to see how many customers are eligible for a Rs 15-lakh car,” he said. Khanna added that after a 5 per cent GST cut and reduced registration cost, amounting to total relief of more than 30-35 per cent, it is doubtful the government will extend any further benefit to the personal EV space.
Another leading auto financier said that it is looking to rejig its loan schemes to make them a bit more attractive for potential EV consumers.
“The FAME-II benefits are currently extended only to vehicles used for commercial purposes and not personal use. Large electric fleet operators are able to get finance. It’s the small fleet operator or the personal buyer who is finding it difficult to buy such cars,” said Neeraj Gupta, founder of the shared mobility cab company Meru, in which Mahindra now has a majority stake.
Gupta added that banks have to play a vital role in opening up financing, which will see volumes expand in the electric vehicle segment.