Report Overview

India Electric Vehicle (EV) Financing Market - Industry Trends & Forecast Report, 2029

India electric vehicle (EV) financing market size was estimated at USD 1.94 billion in 2022. During the forecast period between 2023 and 2029, the India electric vehicle (EV) financing market size is projected to grow at a CAGR of 15.54% reaching a value of USD 5.25 billion by 2029. Major growth factors for the India electric vehicle (EV) financing market include increasing consumer interest and different awareness campaigns across the nation launched by many key industry participants. Additionally, as the market for EVs becomes more organized in the nation, customers prefer more expensive cars, and those looking for deals are favorably affecting the demand for financing for these vehicles.

India Electric Vehicle (EV) Financing Market – Overview

EV financing is a type of loan that enables customers to choose an EV of their choosing and pay for it over the course of a predetermined tenure in Equated Monthly Instalments (EMIs). Electric vehicle (EV) financing can be used to buy a personal or business-use EV. However, the owner or company should be listed on the vehicle's registration. An EV financing's tenure is extremely flexible, allowing consumers to select a term that best meets their needs. The term of an auto loan for an electric vehicle might be anywhere from 12 and 96 months.

India Electric Vehicle (EV) Financing Market

Growth Drivers

Deepening Penetration of Electric Vehicles

India has established itself as one of the biggest markets for EVs. According to the Economic Survey 2023, the domestic EV industry in India will develop at a 49% compound annual growth rate (CAGR) between 2022 and 2030, reaching 10 million sales every year by that point. India registered more than half of its three-wheelers in 2022, indicating the popularity of EVs. This expanding demand for EVs is emerging as the major growth factor for the India electric vehicle (EV) financing market.

Restraints

High Cost Associated With Electric Vehicle Financings

EV financing is not a regulated industry in India with inconsistent interest rates. Furthermore, loans for electric scooters have interest rates that are 4% more than those for comparable gasoline-powered items. Some of the key drawbacks of electric car finance that prevent consumers from considering this option are higher interest rates, shorter loan terms, lower penetration, and greater monthly payments. This serves as a significant impediment to the expansion of the India electric vehicle (EV) financing market.

Impact of COVID-19 on the India Electric Vehicle (EV) Financing Market

The unprecedented COVID-19 pandemic halted the growth of the India electric vehicle (EV) financing market. The coronavirus pandemic's effects on India have primarily disrupted economic activities and resulted in fatalities. Due to the pandemic, India's GDP shrank by 5.5% during FY2021. The manufacturing and sales of automobiles, including EVs, plummeted during the pandemic due to a shortage of labor and a decline in the purchasing power of the customers. As a result, the demand for EV financing suffered greatly, negatively affecting the market growth.

India Electric Vehicle (EV) Financing Market

Segmental Coverage

India Electric Vehicle (EV) Financing Market – By Type

Based on type, the India electric vehicle (EV) financing market is split into new vehicles and used vehicles. The new vehicle segment accounts for a higher share of the India electric vehicle (EV) financing market. The newest safety and fuel-efficient technologies, such as navigation systems, collision warning sensors, etc., are advantages of purchasing a brand-new vehicle. Numerous companies that finance electric vehicles provide incentives for new car loans as well as other benefits like low or zero percent interest rates that make the cost of purchasing new electric vehicles more manageable.

India Electric Vehicle (EV) Financing Market – By Source

Based on the source, the India electric vehicle (EV) financing market is divided into OEMs, banks, credit unions, and financial institutions. The banks segment holds the highest share of the market. The Indian customers are highly inclined towards banks for the EV financing due to low-interest rates compared to other sources. Customers might be able to save more money by connecting with a bank directly before visiting an EV dealership because doing so enables them to compare interest rates. By securing financing in advance, a dealer is also less likely to increase the loan rate as payment for its assistance in the transaction.

India Electric Vehicle (EV) Financing Market – By Vehicle

By vehicle, the India electric vehicle (EV) financing market is segmented into passenger cars, commercial vehicles, two-wheelers, and three-wheelers. The two-wheelers segment accounts for the highest share in the India electric vehicle (EV) financing market. The segment is gaining significant traction owing to the high and rising demand for two wheeler EVs in India. In 2021–2022, there were 3,27,900 electric two-wheelers (E2W) sold overall. According to figures cited by the Society of Manufacturers of Electric Vehicles (SMEV), 1.2 lakh low-speed (LS) e-scooters with top speeds under 25 km/h were sold in FY23.

Competitive Landscape

Major players operating in the India electric vehicle (EV) financing market include State Bank of India, Union Bank of India, ICICI Bank, Axis Bank, IDFC FIRST Bank, Tata Motors, Poonawalla Fincorp Limited, Karur Vysya Bank, Hero Electric Finance, and Mahindra Finance. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In October 2022 – RevFin, a Delhi-based loan agency for individual EV drivers, announced that it had raised USD 10 million in funding in Series A round in a mix of debt and equity capital.

Scope of the Report

By Type

• New Vehicle

• Used Vehicle

By Source

• OEMs

• Banks

• Credit Union

• Financial Institutions

By Vehicle Type

• Passenger Cars

• Commercial Vehicles

• Two-wheelers

• Three-wheelers

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. India Electric Vehicle (EV) Financing Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Deepening penetration of electric vehicles
         2. Growing availability of electric vehicle financing options
         3. Rising adoption of effective risk management strategies by vehicle financiers
      2. Restraints
         1. High cost associated with electric vehicle financings
         2. Lack of Charging Infrastructure
      3. Opportunity
         1. Increasing government multiple initiatives to promote electric vehicles
         2. Surging innovation and developments by major market players
      4. Challenges
         1. Lack of specialized financing institutions
         2. High interest rates
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. India Electric Vehicle (EV) Financing Market Overview
   1. Market Size & Forecast by Value & Volume, 2019–2029
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Type
         1. New Vehicle
         2. Used Vehicle
      2. By Source
         1. OEMs
         2. Banks
         3. Credit Union
         4. Financial Institutions
      3. By Vehicle Type
         1. Passenger Cars
         2. Commercial Vehicles
         3. Two-wheelers
         4. Three-wheelers
5. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. India Electric Vehicle (EV) Financing Company Market Share Analysis, 2022
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Development (Mergers, Acquisitions, Partnerships, etc.)
6. Impact of Covid-19 on India Electric Vehicle (EV) Financing Market
7. Company Profile (Company Overview, Financial Matrix, Competitive landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
   1. State Bank of India
   2. Union Bank of India
   3. ICICI Bank
   4. Axis Bank
   5. IDFC FIRST Bank
   6. Tata Motors
   7. Poonawalla Fincorp Limited
   8. Karur Vysya Bank
   9. Hero Electric Finance
   10. Mahindra Finance
   11. Other Prominent Players
8. Key Strategic Recommendations
9. Research Methodology
   1. Qualitative Research
      1. Primary & Secondary Research
   2. Quantitative Research
   3. Market Breakdown & Data Triangulation
      1. Secondary Research
      2. Primary Research
   4. Breakdown of Primary Research Respondents, By Region
   5. Assumption & Limitation

*Financial information in case of non-listed companies will be provided as per availability

**The segmentation and the companies are subjected to modifications based on in-depth secondary for the final deliverable

List of Figures

Figure 1   India Electric Vehicle (EV) Financing Market Segmentation

Figure 2   India Electric Vehicle (EV) Financing Market Value Chain Analysis

Figure 3   Company Market Share Analysis, 2022

Figure 4   India Electric Vehicle (EV) Financing Market Size, By Value (USD Billion), 2019–2029

Figure 5   India Electric Vehicle (EV) Financing Market Share, By Type, By Value, 2019–2029

Figure 6   India Electric Vehicle (EV) Financing Market Share, By Source, By Value, 2019–2029

Figure 7   India Electric Vehicle (EV) Financing Market Share, By Vehicle Type, By Value, 2019–2029

List of Tables

Table 1      India Electric Vehicle (EV) Financing Market Size, By Type, By Value, 2019–2029

Table 2      India Electric Vehicle (EV) Financing Market Size, By Source, By Value, 2019–2029

Table 3      India Electric Vehicle (EV) Financing Market Size, By Vehicle Type, By Value, 2019–2029

Table 4      State Bank of India Company Overview

Table 5      State Bank of India Financial Overview

Table 6      Union Bank of India Company Overview

Table 7      Union Bank of India Financial Overview

Table 8      ICICI Bank Company Overview

Table 9      ICICI Bank Financial Overview

Table 10    Axis Bank Company Overview

Table 11    Axis Bank Financial Overview

Table 12    IDFC FIRST Bank Company Overview

Table 13    IDFC FIRST Bank Financial Overview

Table 14    Tata Motors Company Overview

Table 15    Tata Motors Financial Overview

Table 16    Poonawalla Fincorp Limited Company Overview

Table 17    Poonawalla Fincorp Limited Financial Overview

Table 18    Karur Vysya Bank Company Overview

Table 19    Karur Vysya Bank Financial Overview

Table 20    Hero Electric Finance Company Overview

Table 21    Hero Electric Finance Financial Overview

Table 22    Mahindra Finance Company Overview

Table 23    Mahindra Finance Financial Overview