India Electric Vehicle Financing Market Size (2024 - 2029)

India EV Finance Market Analysis

Currently, the Indian electric vehicle financing market is valued at USD 2.15 billion, and it is expected to reach USD 4.37 billion, registering a CAGR of above 15% over the next five years.

The COVID-19 pandemic had a mixed impact on the market as the electric vehicle sector across the country suffered production losses in 2020, primarily due to the halt in manufacturing activities and supply chain complexities. With the sales of electric vehicles directly impacting the growth of the financing market, the market witnessed significant growth with the restoration of sales in the second half of 2020, coupled with efforts of vehicle dealers and banking firms in the form of short-term development strategies like offers for preowned cars.

• Overall, nearly 77% of all vehicles in India are financed through banks and non-banking financial corporations (NBFCs), though this share varies across different segments. Leaders in the EV market, such as Aeron Mobility, LeasePlan, QuikLyz, and Energy Efficiency Services Limited (EESL), allow owners to lease electric vehicles instead of owning them, thus encouraging the mass adoption of EVs, especially in government and commercial fleets.

Rising consumer interest and various awareness programs across the country undertaken by several key players operating in the market are expected to drive the demand for EVs. Further, buyers are showing a preference for costlier vehicles, and those seeking lower costs are positively influencing the demand for electric vehicle financing as it gets more organized in the country. Mainstream buyers have also started considering electric vehicles, which is evident from notable EV sales in the country. For instance,

• The overall electric vehicle sales jumped to 428,213 units in FY22, up from 134,463 units in FY2021. All these factors are anticipated to have a significant impact on the electric vehicle-financing industry in the coming years.

Apart from this, the increasing trend of digital underwriting and the adoption of effective risk management strategies by vehicle financiers are likely to augment the demand in the market. In addition, aggressive sales strategies adopted by automotive financers, especially car financiers, to stay in business are likely to boost the growth of the market in the coming years.

India EV Finance Industry Segmentation

Auto financing refers to financial products available for consumers to buy a car without making full payment. The scope of the report covers details about recent developments, trends, and technologies in the market. 

The Indian electric vehicle financing market is segmented by type (new vehicle and used vehicle), source type (OEMs, banks, credit unions, and financial institutions), and vehicle type (passenger cars, commercial vehicles, two-wheelers, and three-wheelers). For each segment, market sizing and forecast have been done on the basis of value in USD billion.