Financing EV Revolution

Exploring Today’s Landscape and Tomorrow’s Opportunities

Knowledge Partner:
 Table of Contents

Automotive Electrification Trends 03

Automotive Electrification Trends 03

Vehicle Financing Evolution06

Vehicle Financing & Evolution 06

EV Financing Landscape Key Stakeholders09

EV Financing Landscape & Key Stakeholders 09

Challenges and Opportunities in EV Financing 14

Challenges and Opportunities in EV Financing 14

Innovative Business Model: Battery as a Service 20

Innovative Business Model: Battery as a Service 20

Investor’s Outlook on EV Financing Sector26

Investor’s Outlook on EV Financing Sector 26

 Automotive
Electrification Trends
 India’s Booming Automotive Industry: .

Set to reach $300 Bn by 2026

India Stands as the 3rd Largest Automotive Market Globally in terms of
domestic sales.

28 Mn+ 6%
Vehicles Sold (FY24) 1 Every 3 out of 4 vehicles sold is a 2W Share in GDP 2

Indian Automotive sector attracted $36 Bn in Foreign Direct Investment

(FDI) over the past four years.

The “Electric” Future of Automobiles

1.67 Mn electric vehicles were sold in FY 2023-24, with an

EV penetration rate 3 of 7% in FY 2024.

Bharat’s ambitious plan for achieving 30% EV penetration by 2030

E2W E3W E4W: Personal E4W: Shared

FY26 13-15% 18-20% 3-4% 6-7%

FY30 35-40% 26-29% 9-11% 20-25%

1 Both Domestic and Export sales
2 Includes Passenger and commercial vehicles 04
3 Penetration Rate excludes export Sources: IBEF, NITI Aayog, Invest India
 EV Sales Trend in India
Unit Sales Prominent Players

E2W

948 K
728 K

FY23 FY24
E3W

632 K
402 K

FY23 FY24
E4W*

80 K
40 K

FY23 FY24

05
* excludes Hybrid vehicles Sources: SMEV
Vehicle Financing
& Evolution
 Vehicle Financing in India

Currently, the total vehicle loan AUM

$110 Bn
stands at $150 Bn.

$80 Bn
Vehicle loans are NBFCs' second-largest
segment, with an AUM of $80 Bn in 2024 2024 2026
with expected growth rate of 15-16%.
NBFC’s Auto finance AUM

Key factors pushing demand

Greater availability Rising income and High activity levels

of credit and consumption due to in infrastructure and
financing options growing young population transportation

Passenger Vehicle
Auto-Finance

75-80%
Penetration

Commercial Vehicle

95%

07
Sources: News Articles, NITI Aayog
 Evolution of Auto Finance in India
Mid-20th Century
Introduction of vehicle loans by banks
and NBFCs driven by post-war
economic expansion
1980-1999
1991: Economic liberalization
opens the market to foreign
automakers and stimulates the
financial sector
2000-2010
1993: Auto Policy promotes
Introduction of features like integrated development of the
installment & hire purchase finance, automotive sector, supporting the
safety measures through title over expansion of automobile financing
assets, and development of a resale
market for vehicles
2011-2019
Augment of online loan approval
process making auto loans faster &
more accessible. The EV sector also
developed, influencing EV-specific
financing options
2020-Present
Post-pandemic, growth in subscription
models and leasing over traditional
financing. Introduction of AI in
assessing credit risk and personalizing
loan offers

08
Sources: News Articles
EV Financing Landscape
& Key Stakeholders
 India’s EV Financing Landscape
EV financing in India is a growing financial service tailored to the unique
characteristics. Although EVs have higher upfront costs, their TCO is considerably
lower, leading to a distinctive financing landscape

By 2030, the annual EV finance market is projected to

reach $50 Bn (INR 3.7 lakh crore)
$50 Bn
By 2030
Innovative financial solutions are needed to mitigate
challenges for both customers and financiers.

Half of global EV financing investments were made in India*

*In past 3 years (exc. Battery Leasing)

~61%

$123 Mn $75 Mn
Across 24 rounds Across 15 rounds
10
Sources: NITI Aayog, Tracxn
 Key Stakeholders
to the EV Financing Ecosystem

Focuses on green loans and Offer EV lifecycle management with

bonds, offering affordable rates, bundled services like insurance,
primarily targets 4Ws maintenance, and claims
management.

Fleet Managers: Significant capital

for the fleet acquisition / leasing

Battery Leasing : Funding for

NBFCs

Majority of E2W and E3W

B2B
loans (64%) by NBFCs due to battery procurement and/or
Active transitioning to finance manufacturing
due to higher margins
3PL Logistics and Quick
Commerce: Companies managing
their own fleets

Enhances EV access through Individuals: Driven by EVs' high upfront

innovative solutions such as costs, expanded charging infrastructure,
personalized loans and buybacks innovative financing, and some resale
value assurances

Supply Side 11 Demand Side

 Industry Insights from Key Player
Let’sEV, a subsidiary of Gensol Engineering, is a rapidly growing EV-
focused leasing company in India, driving EV adoption through
innovative leasing and fleet management solutions. With expertise in
Subsidiary of the leasing value chain, Let’sEV aims to make electric mobility
accessible, supporting India’s net-zero target by 2070 through
sustainable mobility solutions.

India’s EV market is set to surge past $110 billion by 2029, growing at a remarkable CAGR of
66.52%. As we stand at the brink of a mobility revolution, Let’sEV is proud to be a driving force
in this transition.

Our mission is simple yet powerful: to make electric mobility more accessible, cost-effective,
and convenient for businesses and individuals alike. We envision a future where sustainability
isn’t an option—it’s the norm.

Through our innovative EV leasing solutions, we are accelerating adoption across diverse use
cases, contributing to cleaner air, reduced carbon footprints, and a net-zero India. Together,
we are not just embracing change—we are leading it.

The next phase of EV leasing must be as transformative as the

vehicles themselves that will ensure that the sector grows at a
rapid pace.

Amit Kumar
CEO, Let’sEV

7,000+ 4,500+
EVs Leased EV Charging Stations

12
 Notable Companies in EV Financing
Along with their Total Fundraise

Public $29 Mn $29 Mn $23 Mn

$16.4 Mn $15 Mn $13 Mn $11 Mn

Indian

$10 Mn $6 Mn $1.1 Mn $0.9 Mn

$0.6 Mn Acquired by Ecofy NA NA

Global

$28 Mn $8.8 Mn $1.3 Mn

NA NA NA

13
Only Equity funding included Sources: Tracxn
Challenges and Opportunities
in EV Financing
 EV vs ICE:
Comparative Study of Auto-Finance
Personal Usage
Category Banks* NBFCs* Tenure (Months) Loan to Value
EV 18 to 36 65-80%
2W 100-400 bps 150 -300 bps
ICE 48 Up to 95%

EV 20-25 bps lower 36 to 120 80-90%

4W rates available No Diff
ICE under green loans 36 to 84 80-90%
*Unless otherwise specified, indicates BPS higher vs ICE

Commercial Usage
Category Banks* NBFCs* Tenure (Months) Loan to Value
EV 12 to 24 65-80%
2W Up to 900 bps 200 to 300 bps
ICE 12 to 24 75-85%

3W EV 24 to 42 70-90%
- 100-700 bps
Passenger ICE 24 to 60 85-100%

3W EV 24 to 42 70-90%
200-250 bps 100-800 bps
Cargo ICE 24 to 60 85-100%

EV 36 to 60 60-70%
4W Up to 200 No Diff
ICE 48 to 60 80-90%
*Unless otherwise specified, indicates BPS higher vs ICE

15
Sources: NITI Aayog
Concerns and Risks Associated with
EV Financing
Primary Risks in Vehicle Financing

Asset Risk Credit Risk

Vehicle performance, Customer capacity &
life, and resale Intent to repay

Key Challenges
The root causes of the challenges faced in EV Financing are not homogenous
across vehicle categories. Below are the key challenges faced:

Higher Initial Down Payment

10-30% lower Loan to value for EV vs ICE

Higher EMI Burden & Interest Rates

Tenor 6-18 months shorter & Interest rate 1-7% higher

Recurring Capital Expenditure

Battery replacement costs after a few years

16
Financiers’ & Customers’ Pain Points
Many of the pain points witnessed by the customers primarily stem from
challenges faced by financiers

Resale value of the vehicle is not predictable

Unestablished
due to limited understanding of asset decay
resale market
curve and intrinsic value

Understanding increased customer risk due to

Increased
increased EMIs and life of asset including
credit risk
battery

Absence of information on usage, state of

Battery life
health (SOH) of battery, unclear standards for
not known
batteries

Fast changing technology innovation curve

Battery tech
coupled with financiers' limited knowledge on
unknown
performance

Absence of historic data on performance under

Uncertain
various usage conditions and risk of product
product quality
failure

Inadequate Inadequate support and warranty terms from

support and OEMs are major concerns, affecting product
warranty terms confidence and risk.
17
Potential Solutions for EV Financing
Accessibility

Ensuring affordable financing for EVs

Absorption of higher Restructure products for Reduce risk of

risk by ecosystem better cash flow technology obsolesces

Set up low-cost funds

Enable de-coupling of Establish battery safety
with risk sharing
battery and vehicle standards &
mechanisms / FLDG
performance
certification framework
Reduce EMI through
Promote tax effective
interest subvention, tax
green bonds and asset-
exemption &
backed securities
accelerated depreciation
Develop framework for
Include commercial EV circular economy for
Support scaling of fleet
loans for driver owners battery
ownership, reverse
under priority sector
leasing, and flex loans
lending

Promote secondary market for used EVs through OEM buyback programs and
purchase subsidies

Build industry-wide platform to ideate, promote and fund innovative financing

models & raise technology awareness

Financing & leasing companies must develop models for vehicle refurbishment
or 2nd life battery financing to extend vehicle usage in commercial applications
18
Innovative Financing Options to
Drive EV Affordability
Financing Models Leasing Models

Subscription-based Model Lease Model

A recurring fee model for EV Reduces upfront costs and

use, offering flexibility to maintenance. In Operating
change vehicles or terminate Lease, the leasing company
subscriptions promptly. retains residual value.

Peer-to-peer lending Lease-to-own Model

Borrowing from individual A hybrid model where

investors instead of banks, customers lease EVs for a set
providing competitive rates period with a mandatory
and flexible terms. purchase at the end.

Balloon Loans Pay-per-use Model

This option features lower Resembles micro-leasing to

monthly payments and a allow short-term EV rentals
sizable final payment at the with fixed rates based on
term's end time or range basis

19
Innovative Business Model
Battery as a Service
 Making EVs Affordable with
Battery as a Service
Separates battery ownership from the vehicle, reducing the upfront cost of
purchasing an EV by allowing the battery to be used through periodic fees
instead of a one-time payment.

Purchase from Loan from

Battery Manufacturer EV Financier
BaaS Vehicle w/o battery

Fixed / Usage-based fee Purchase Price

Leasing Co. Customer OEMs

Key Highlights of the Business Model

Purchase cost & Lower initial EV purchase cost by leasing the battery
Leasing fees separately, paying a usage-based fee

Maintenance & Leasing company maintains the responsibility for the

Replacement battery’s performance and replacement

Lessor earns revenue through leasing fees and benefits

Revenue Stream from economies of scale in battery purchasing and
management
21
 Battery Leasing vs. Battery Swapping
Battery Leasing

The service provider retains ownership of the

battery, transferring it at the end.

The user gets a dedicated battery with the MG's BaaS lets customers
vehicle. buy the vehicle while
leasing the battery
separately through
Monthly or pay-per-use fee based on battery financiers like Bajaj
Finance, Herofin,
capacity, usage, or mileage. VidyutTech, Ecofy and
Autovert.
Ideal for individuals or fleet operators
looking for cost-effective ownership

Battery Swapping

The battery remains owned by the service

provider throughout its lifespan.

Users swap discharged batteries for fully SUN Mobility offers Battery
charged ones at swapping stations. as a Service (BaaS) through
a battery swapping network
for electric two-wheelers,
Pay-per-swap or subscription-based pricing three-wheelers, and
model. commercial vehicles.

Suitable for commercial fleets, delivery

services, and high-usage vehicles.

22
 Battery Leasing:
Key Advantages and Challenges
Advantages

More Affordable EVs

Lowers EV prices, making them more affordable and boosting adoption
in emerging markets.

Predictable PPA* model

Financing institutes can model payments based on annual km-driven
and battery deployment, charging fixed rates per year

Control over value chain

Financial institutes can control value-addition steps like raw materials,
manufacturing, energy throughput, and recycling

Challenges

Cost of Capital
Risk premium on battery pack financing is high and lack of established
usage track records results in high cost of capital

All Batteries are not equal

Different batteries offer varying lifetime throughputs, necessitating life
modeling through testing and data analysis

Second-hand battery market

The second-life battery market hasn't materialized yet, hindering the
viability of second-life battery costing models

23 *PPA – Power Purchase Agreement

 Battery Swapping:
Potential and Challenges

Depleted battery can be swapped for a

Battery is made available as a
fully charged battery quickly at swapping
part of a subscription
stations

Potential for BaaS Challenges for BaaS

Alleviates range anxiety and cuts

Difficult to scale without significant
initial EV costs via battery swapping
battery standardization
and subscription models

Enhances urban charging and boosts Uncertainty over the ownership of

grid flexibility with peak-hour the battery, particularly when BaaS
discharging at swap stations EV is re-sold

Promotes battery recycling through BaaS is more convenient for smaller

second-life applications in onsite EVs; difficult implementation for
storage heavy EVs such as 4Ws, trucks

24
 BaaS: Investment Outlook

$254 Mn ~50%
$126 Mn
Across 35 rounds Across 11 rounds

Global India
*In past 3 years

Notable Battery-as-a-Service Companies

India Total Equity Funding Global

Series B Late Stage Post IPO Series C

$130 Mn $50 Mn $480 Mn $116 Mn

Seed Seed Series A Series B

$5.2 Mn $1.4 Mn $38.5 Mn $10.8 Mn

25
Only Equity funding included Sources: Tracxn
Investor’s Outlook on
EV Financing Sector
Unlocking EV Potential with Financial Innovation

LeapFrog invests in exceptional businesses across Asia and Africa.

Its portfolio spans 37 countries, reaching 537 million people with
financial services, healthcare, and climate solutions. LeapFrog’s
Climate Strategy targets companies offering cost-competitive
green products and services, supported by favorable regulatory
environments in emerging markets.

As India continues to grow, the scale and contribution of emissions from the transportation
sector will continue to escalate. We believe that to make meaningful progress towards our Net
Zero targets, the rate of electrification of mobility must exceed the rate of overall growth in
emissions from the sector.

As the EV value chain begins to take shape in the country, solving for EV financing will be
critical in delivering the incremental acceleration of electrification. At Leapfrog we are excited
to support the evolution of Mobility across the value chain and see opportunity for technology
enabled underwriting and financing mechanisms to capture value.

Declining TCO will enable EV adoption across vehicle segments and

consumer types, and we believe that EV financing solutions will be
integral towards translating this green discount between EV and
ICE vehicles for businesses as well as retail customers.

Nakul Zaveri
Partner, LeapFrog Investments

Investment in EV
Financing Space
 Unique Opportunity to Support Innovation

Green Frontier Capital, India’s largest climate fund founded by

Sandiip Bhammer, invests in green companies with disruptive
models, fast revenue growth, 20-25% USD IRRs, and measurable
decarbonization and SDG impact.

The future of the EV ecosystem in India is incredibly bright. As the country transitions to
sustainable mobility, we're witnessing a growing demand for electric vehicles across consumer
and business sectors. Companies like Revfin, BluSmart, BatterySmart, ElectricPe, and Euler are
leading the way, making EVs more accessible, affordable, and practical.

With supportive government policies, expanding charging infrastructure, compelling unit

economics, and rising environmental awareness, the sector is poised for exponential growth.

From an investor's perspective, this is a unique opportunity to

support innovation that bridges the gap between consumer
aspirations, affordability, and the rapid adoption of electric
mobility, all of which are critical for India's sustainable future.

Sandiip Bhammer
Partner, Green Frontier Capital

Investment in EV
Financing Space
Pioneering EV Transition with Strategic Capital

Avaana Capital is India's first institutional climate-focused venture

capital fund. The firm invests in early-stage startups that leverage
technology and innovation to address climate mitigation, adaptation,
and resilience, in underlying sectors such as Energy Transition,
Resource Management, Mobility, Supply Chains, Sustainable
Agriculture and Food Systems.

The adoption of electric vehicles (EVs) in India has seen unprecedented growth in
recent years. Multiple original equipment manufacturers (OEMs), infrastructure
providers, and software solutions have emerged to aid the development of this
ecosystem.

Given the continuous emergence of whitespaces and business models, we believe the
EV sector will attract further investment as consumer adoption increases and
infrastructure barriers improve. Avaana Capital is proud to support trailblazing
companies such as Turno, Alphavector, and Kazam, which are enabling affordable
and accessible adoption of EVs.

Anjali Bansal & Swapna Gupta

Partners, Avaana Capital

Investment in EV
Financing Space
 EVs: From Niche to Mainstream

Caret Capital is a Venture Capital fund that backs category building

startups across Mobility, Distribution and Employment - the three
inter-connected sectors that are critical to India's growth story.

Over the last few years, we have seen Electric Vehicle sales grow from almost
negligible to approximately 2 million vehicles leaving no doubt that EV’s are now a
mainstream industry. Largely these sales were driven by 2 wheelers and 3 Wheelers
across commercial applications.

With the expectation that this Industry will continue to penetrate the market further
to reach 30% market share -- In the near future, we now expect the ecosystem to
further deepen its roots by innovating across the key components that form parts of
the vehicle and believe that this would help in further strengthening of this industry.

Karan Mittal
Partner, Caret Capital

Investment in EV
Financing Space
 Convergence of Technology & Finance

3one4 Capital is an early-stage VC firm investing in high-growth

sectors, including SaaS, fintech, automation, consumer internet, digital
health, and climate tech. It focuses on scalable solutions at the
intersection of machine-driven intelligence, digital media, logistics,
and distribution.

The Indian EV market is on track to hit $30 billion by 2030. It’s more than just
financing vehicles; it’s about investing in the tech behind the EV ecosystem.
Companies like Vidyut exemplify this new paradigm, merging financial innovation
with engineering and technology.

Connected vehicles produce data streams that allow for accurate residual value
estimates and new models like Battery-as-a-Service. This shift from traditional
financing uses real-time data for dynamic risk assessment, predictive maintenance,
and tracking vehicle history, building trust in the pre-owned market.

The fusion of tech and finance makes the Indian EV space an

exciting investment, shaking up traditional asset classes.

Sonal Saldanha
Vice President, 3one4 Capital

Investment in EV
Financing Space
Notable Investors in EV Financing

31
 A Note by

The EV financing industry is undergoing a transformative shift, driven by rising demand,

innovative financial models, and increasing investor interest. While electric mobility is
gaining traction, its growth hinges on the development of a robust financing ecosystem that
addresses affordability, risk mitigation, and long-term viability.

Key Takeaways
Expanding Market Potential: India’s EV financing market is set to reach $50 billion by 2030,
with a major share of global EV financing flowing into the country, highlighting strong growth
potential.

Challenges Hindering Wider Adoption: Higher down payments, lower loan-to-value ratios,
and shorter loan tenures make EVs less affordable. High interest rates, uncertain resale
values, and limited battery performance data further slow adoption.

Innovative Financing Solutions: Models like Battery-as-a-Service, leasing, and pay-per-use

reduces initial upfront costs. NBFCs dominate financing, especially for two- and three-
wheelers, while investors support flexible funding solutions.

The Path Forward: Standardizing battery technology, developing a used EV market, and
improving risk-sharing will strengthen financing. Collaboration among financiers, OEMs, and
policymakers is crucial for long-term growth.

Final Thought: A Sector in Transition

The success of India’s EV revolution will depend not only on vehicle innovation but also on
the adaptability of the financing ecosystem. As stakeholders work to bridge existing gaps, the
industry is poised to drive a cleaner, more accessible, and financially viable transition to
electric mobility.
 Call to Action!

Be a Part of Climate Positive Ecosystem!

A loud shout to founder/innovator, investor or

expert in the climate tech space for
registration on our platform.

Key Contributors

Amit Kumar, Let’sEV (Gensol Group) Sandiip Bhammer, Green Frontier Capital

Anjali Bansal, Avaana Capital Sonal Saldanha, 3one4 Capital

Karan Mittal, Caret Capital Swapna Gupta, Avaana Capital

Nakul Zaveri, LeapForg Investments

Team at
The Climate Guys:
Swetabh Pareek Danish Khan Manav Thakkar

Khushi Chhabra Bhavesh Baheti Vignesh Rajaganapathy

Contact for further details:

Swetabh Pareek Website LinkedIn

https://theclimateguys.com/ www.linkedin.com/company/the-climate-guys/

[email protected] https://theclimateguys.com/ www.linkedin.com/company/the-climate-guys/

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