How to Make Finance Cheaper, More Accessible for EVs in India

This briefing by RMI examines the financial barriers to electric vehicle (EV) adoption in India, identifying risk as the primary driver of higher interest rates and down payments. It estimates the cumulative capital investment needed for India's EV transition and proposes a toolkit of financial instruments to lower the cost of capital and increase accessibility.

• Electric vehicles (EVs) in India are viewed as a riskier asset class than internal combustion engine vehicles, leading banks and non-banking financial companies (NBFCs) to charge higher interest rates and require larger down payments. These risks are split into 'asset risk' (technology, policy, manufacturing, and resale) and 'business model risk' (customer profile, expected utilization, and operations and maintenance).
• India's EV transition is projected to require a cumulative capital investment of 19.7 trillion Indian rupees (approximately US$266 billion) over the next decade for batteries, charging infrastructure, and vehicles. By 2030, the potential market size for EV financing in India is estimated at ₹3.7 trillion (US$50 billion).
• RMI proposes a toolkit of five financial instruments to improve EV finance accessibility: including Priority sector lending (PSL) to incentivize banks via Reserve Bank of India guidelines; interest rate subventions (already used in Delhi); product guarantees and warranties from OEMs; risk-sharing mechanisms (such as partial credit and utilization guarantees); and the development of a secondary market through buyback and battery repurposing schemes.

APA

RMI (2021). How to Make Finance Cheaper, More Accessible for EVs in India. https://rmi.org/resources/how-to-make-finance-cheaper-more-accessible-for-evs-in-india/

Chicago

RMI. How to Make Finance Cheaper, More Accessible for EVs in India. 2021. https://rmi.org/resources/how-to-make-finance-cheaper-more-accessible-for-evs-in-india/.

Wikipedia

{{cite report |author=RMI |title=How to Make Finance Cheaper, More Accessible for EVs in India |date=10 February 2021 |url=https://rmi.org/resources/how-to-make-finance-cheaper-more-accessible-for-evs-in-india/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2021how, author = {{RMI}}, title = {{How to Make Finance Cheaper, More Accessible for EVs in India}}, institution = {RMI}, year = {2021}, month = feb, url = {https://rmi.org/resources/how-to-make-finance-cheaper-more-accessible-for-evs-in-india/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }