Banks urged to drive battery and EV finance for India's electric future

by Margaret Lau
Electric future: Indian PM Narendra Modi with Tesla chief Elon Musk in 2015. Photo: PM's Office
India’s transition to electric vehicles will require a cumulative capital investment equivalent to around $266bn (£219bn) for batteries, charging infrastructure and the EVs themselves over the next decade, says a report released today.

The report also identifies a market size of $50bn for the financing of EVs in 2030 – around 80% of the current size of India's retail vehicle finance industry, estimated to be worth about $60bn currently.

The 'Mobilising Finance for EVs in India' report, by Indian government policy think tank, the National Institution for Transforming India (NITI Aayog) and clean energy think tank, the Rocky Mountain Institute, recommends a 10-point plan to attract the required capital.

The report comes just weeks after India launched a battery manufacturing incentives scheme aimed at attracting international and domestic players to develop giga-scale advanced cell production facilities in the country.

Priority lending

Recommendations in the new report including establishing priority sector lending and interest rate subvention, while improving partnerships between original equipment manufacturers and financial institutions, by providing product guarantees and warranties.

NITI Aayog CEO Amitabh Kant said: "The need of the hour is to mobilise capital and finance towards EV assets and infrastructure. As we work to accelerate domestic EV adoption and push for globally-competitive manufacturing of EVs and components, such as advanced cell chemistry batteries, we need banks and other financiers to step up to lower the cost and increase the flow of capital for EVs.”

Clay Stranger, Rocky Mountain Institute senior principal said re-engineering vehicle finance and mobilising public and private capital "will be critical to accelerating the deployment of the 50 million EVs that could be plying on India's roads by 2030”. 

"These solutions represent high-leverage areas for interventions in finance, and we believe that many are relevant beyond India.”

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