Banks and non-banking financial companies (NBFCs) in India have the potential to achieve an electric vehicle (EV) financing market size of ₹40,000 crore by 2025 and ₹3.7 lakh crore by 2030, the official think tank said in a report on EVs released on Friday.
“However, retail finance for EVs has been slow to pick up,” said the report prepared along with Rocky Mountain Institute (RMI) and RMI India.
It suggested that the central bank may consider various EV segments and use cases based on five parameters: socio-economic potential, livelihood generation potential, scalability, techno-economic viability, and stakeholder acceptability.
Priority-sector lending (PSL) aims to expand financial access and support employment opportunities in India.
“Financial institutions have an important role to play in accelerating the adoption of EVs in India and supporting the decarbonisation of road transport,” said Amitabh Kant, chief executive officer of Niti Aayog.
“RBI’s PSL mandate has a proven track record of improving the supply of formal credit towards areas of national priority. It can provide a strong regulatory incentive for banks and NBFCs to scale their financing to EVs,” he said.