India’s EV Financing Industry Projected to be $50 Billion by 2030: NITI Aayog

Transition to EV regime will require an investment of $266 billion over the next decade


India’s transition to electric vehicles (EV) will require a cumulative capital investment of $266 billion (₹19.7 trillion) in EVs, charging infrastructure, and batteries over the next decade, according to a report by NITI Aayog and Rocky Mountain Institute (RMI).

In their ‘Mobilising Electric Vehicle Financing in India’ report, they assessed that the market size of financing of EVs would be $50 billion (₹3.7 trillion) in 2030—about 80% of India’s retail vehicle finance industry’s current size worth $60 billion (₹4.5 trillion) today.

“The need of the hour is to mobilize capital and finance towards EV assets and infrastructure. As we work towards accelerating the domestic adoption of EVs and push for globally competitive manufacturing of EVs and components like advanced cell chemistry batteries, we need banks and other financiers to lower the cost and increase the flow of capital for electric vehicles,” said Amitabh Kant, CEO, NITI Aayog.

So far, India’s EV ecosystem has 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, the report said.

Solutions Toolkit

NITI Ayog and RMI have identified a toolkit of ten solutions that financial institutions such as banks and non-banking financial companies, the industry, and government can adopt to catalyze the required capital. End-users currently face several challenges, such as high-interest rates, high insurance rates, and low loan-to-value ratios.

The ten solutions recommended in the report include financial instruments such as priority-sector lending and interest-rate subvention. Others are related to creating better partnerships between OEMs (Original Equipment Manufacturers) and financial institutions by providing product guarantees and warranties.

“Re-engineering vehicle finance and mobilizing 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,” said Clay Stranger, Senior Principal, Rocky Mountain Institute.

A developed and the formal secondary market can improve EVs’ resale value and improve their bankability. “The identified barriers within EV finance need to be tackled in a structured manner with innovative financing models,” said Randheer Singh, Senior Specialist at NITI Aayog.

Recommendations beyond finance include digital lending, business model innovation, fleet, and aggregator electrification targets, and the creation of an open data repository for EVs.

The report says that investment in India’s transition to electric mobility can create significant economic, social, and environmental benefits for the country. As the economics of EVs continue to improve, new business models and financing instruments gain acceptance, and government programs drive early adoption and promote domestic manufacturing, India’s EV market is poised for growth in the coming decade.

The industry expects a phenomenal 2021 for EVs in the country after manufacturing and sales of EVs were severely impacted in the first half of 2020 due to the COVID-19 pandemic and a lengthy lockdown.

Despite the pandemic’s adverse consequences, several Indian EV startups managed to raise funding in 2020, which speaks of the potential investors see in this segment.


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