Banking on Electric Vehicles in India

The document highlights a potential investment need of INR 19.7 lakh crore ($US266 billion) for India's EV transition between 2020 and 2030, noting that retail lending remains slow due to perceived risks. It proposes that the Reserve Bank of India include EVs in its Priority Sector Lending (PSL) guidelines—which require banks to allocate 40 percent of credit to priority sectors—to institutionalize EV financing and provide buyers with interest rates and tenures comparable to internal combustion engine vehicles.

• Cumulative investment required for India's electric vehicle transition is estimated to reach INR 19.7 lakh crore ($US266 billion) from 2020 to 2030.
• Retail lending for EVs is lagging because banks and non-banking finance companies (NBFCs) perceive significant asset and business model risks, leading to less favorable interest rates and tenures for EV buyers compared to those for internal combustion engine vehicles.
• Integrating EVs into the Reserve Bank of India's Priority Sector Lending (PSL) guidelines, which mandate that scheduled banks allocate 40 percent of total credit to priority sectors, could mainstream EV financing and support credit-deficient segments.

APA

RMI (2022). Banking on Electric Vehicles in India. https://rmi.org/resources/banking-on-electric-vehicles-in-india/

Chicago

RMI. Banking on Electric Vehicles in India. 2022. https://rmi.org/resources/banking-on-electric-vehicles-in-india/.

Wikipedia

{{cite report |author=RMI |title=Banking on Electric Vehicles in India |date=21 January 2022 |url=https://rmi.org/resources/banking-on-electric-vehicles-in-india/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022banking, author = {{RMI}}, title = {{Banking on Electric Vehicles in India}}, institution = {RMI}, year = {2022}, month = jan, url = {https://rmi.org/resources/banking-on-electric-vehicles-in-india/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }