India is actively pursuing sustainable transport. This is now part of national development. The government targets electrifying 30% of private cars. It aims for 70% of commercial cars. Buses should be 40% electric. Two and three-wheelers should be 80% electric by 2030. This plan reduces fossil fuels. It also cuts urban pollution. True energy self-sufficiency is a goal.
The Indian electric vehicle (EV) market is growing fast. Two-wheelers lead EV sales, making up nearly 60%. Over 2 million high-speed electric two-wheelers sold in FY 2024-25. Commercial transport is also electrifying quickly. Buyers in key areas need easy financing. Many lack formal credit history. Traditional banks exclude them. New credit models are key for India’s EV success.
Government policies support the EV sector. The Ministry of Heavy Industries leads the FAME India Program. FAME offers subsidies to buyers and makers. This lowers EV prices. It boosts EV sales, especially for two and three-wheelers. FAME-II has a budget of 100 billion rupees.
The Production Linked Incentive (PLI) scheme supports domestic EV manufacturing. The ACC Battery PLI Scheme, costing $2.5 billion, builds ACC production. It also aims for better battery cells. This reduces reliance on imports. It strengthens India’s battery supply chain. The Auto & Auto Component PLI Scheme has 25.9 billion rupees. It funds Advanced Automotive Technology. This includes battery EVs and hydrogen fuel cell vehicles. Goals include reducing costs, increasing scale, creating jobs, and building supply chains.
The PM Electric Drive Revolution initiative supports green mobility. It has a two-year plan and 109 billion rupee investment. It enhances the EV ecosystem. Battery Waste Management Rules 2022 focus on battery reuse and recycling. Tamil Nadu is helping with battery scrapping and recycling. These policies create a circular EV economy. They boost self-sufficiency. They cover manufacturing, charging, and recycling. This requires financing beyond vehicle purchase.
Banks have been slow to enter the EV market. They see opportunities but also risks. Old product ideas influence their caution.