The India electric vehicle (EV) financing market is gaining traction because of the growing availability of EV financing options and rising adoption of effective risk management strategies by vehicle financiers.
BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated the India electric vehicle (EV) financing market size 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 an impressive CAGR of 15.54% reaching a value of USD 5.25 billion by 2029. Rising consumer interest and various awareness campaigns around the country launched by several important industry players are major growth factors for the India electric vehicle (EV) financing market. Additionally, as the EV market in the country gets more organized, consumers are exhibiting a preference for more expensive automobiles, and those looking for discounts 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 choice and pay for it over the course of a predetermined tenure in Equated Monthly Instalments (EMIS). 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 EV might be anywhere from 12 and 96 months.
India Electric Vehicle (EV) Financing Market – By Source
Based on source, the India electric vehicle (EV) financing market is segmented into OEMs, banks, credit unions, and financial institutions. The banks segment holds the highest share in the India electric vehicle (EV) financing market. The Indian customers are highly inclined toward 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.
Impact of COVID-19 the India Electric Vehicle (EV) Financing Market
The unprecedented COVID-19 pandemic affected the growth of the India electric vehicle (EV) financing market. The coronavirus pandemic’s effects on India primarily disrupted economic activities and resulted in fatalities. Due to the pandemic, India’s GDP shrank by 5.5% in 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.
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.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and the India Electric Vehicle (EV) Financing Market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in the India Electric Vehicle (EV) Financing Marketand industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.
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