The Rise of EV Financing to Push the EV Goals of the Country
We are present in a time where we are witnessing a change of the century. In the initial decades of the century, we are experiencing how cars are now shifting from fossil fuel-based models to electric vehicles, and this rise is happening due to multiple reasons.
For example, one of the most common types of loan is the auto loan which people take when they are buying any vehicle. EV adoption will only rise in countries like India when the proper financing option is available. Therefore it shows the parallel rise in auto loans is also necessary to promote the EVs in the country.
The positive aspect is that it helps a country to get better financing options. Through that, one can choose to buy EV vehicles, which will help the auto companies and the industry to achieve their EV adoption target.
In this blog, we will look into the processes of auto loans and how this disbursement is influencing millennials and Gen Zs to increase their spending on vehicles and take the new model.
The Rise of Government Support and Key Initiatives
The government now plays a key role in the industry as it’s pushing the finance companies by giving credit incentives to pass as many auto loans to underserved customers. For example, a person who has decided to get an EV can get in touch with a DSA partner who can serve the best banks to get the auto loans for that purchase.
The government has big plans to push certain sectors based on its Paris Agreement, where it aims to become carbon neutral by 2050. To reach and meet the project guideline in time the country is taking serious steps so that it can attain that target faster and efficiently.
Making the Financing Option More Flexible
The next task that the private players took charge of was to make the industry large and tap fully into this next phase of growth for the finance companies. For example, the finance companies are giving better flexibility for repayment to the buyers of the EV.
The core objective of the banks and NBFCs from the government is also to reduce the interest rate, which will allow the person to get a loan at a much cheaper cost. There are certain concessions even in 2Ws and 3Ws, where the interest rate and down payments also differ.
Banks Build Collaborations and Forging Partnerships
One of the best ways the banks have better deals is through forging partnerships with auto companies and fintech organizations, which will allow the banking companies to get more customers and help customers get better financing options.
Another aspect of this collaboration is it helps the auto companies to use the technologies of the bank and provide financing options within the showroom of the EV vehicles. The main goal for the auto companies and the banks to increase EV adoption is to streamline the buying experience, which will result in faster purchases and better sales, leading to smooth help from the support desk of the company.
EV- Special Financial Instruments
The role of the EV special financial instruments is a part of the sector where the financial products are made, which are tailored to promote the sector of EV and help consumers adopt the vehicle faster. For example, there are warranties at the current time that take care of the battery degradation, and also the insurance plans that are designed to promote EV-related concerns.
EV Funding For Business and Other Parts of the Value Chain
Apart from the consumer’s perspective on the other parts of the business value chain of EVs, there are options for loans for growth in this sector. There is an app for DSA where one can find the agents, and from their recommendations, one can get a business loan at a better and more competitive interest rate.
For example, banks are providing large corporate loans and business loans to the MSMEs who are working on certain aspects of the EV value chain. It can be a battery manufacturer or a charging station owner. All are getting financial assistance to set up their business to facilitate the trend of EVs in the country.
This rise in financing options in this sector is taking the mission forward of turning the country into an EV state and making the nation free of pollution.
