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India’s electric vehicle (EV) financing industry is projected to be worth Rs 3.7 lakh crore in 2030, about 80 percent of the current retail vehicle finance industry, according to a new report.

The report titled ‘Mobilising Electric Vehicle Financing in India’, prepared by NITI Aayog and Rocky Mountain Institute (RMI) India pointed out end-users currently face several challenges such as high interest rates, high insurance rates, and low loan-to-value ratios.

It said India’s transition to electric vehicles (EVs) will require a cumulative capital investment of $266 billion (Rs 19.7 lakh crore) in EVs, charging infrastructure, and batteries over the next decade.

The report also identified a toolkit of 10 solutions that financial institutions such as banks and non-banking financial companies (NBFCs), as well as the industry and the government can adopt in catalysing the required capital.

“India’s electric vehicle (EV) financing industry is projected to be worth Rs 3.7 lakh crore in 2030-about 80 percent of the current size of India’s retail vehicle finance industry, worth $60 billion (Rs 4.5 lakh crore) today,” the report said.

According to the report, the 10 solutions recommended include financial instruments such as priority-sector lending and interest-rate subvention.

Others are related to creating better partnerships between OEMs and financial institutions by providing product guarantees and warranties, it said.

Commenting on the report, NITI Aayog CEO Amitabh Kant said the need of the hour is to mobilise capital and finance towards EV assets and infrastructure.

The report pointed out that investment in India’s transition to electric mobility has the potential to create significant economic, social, and environmental benefits for the country.

In another development, Delhi’s Deputy Chief Minister Manish Sisodia said that the Delhi government aims to convert its entire transport fleet to an electric vehicle system in the next 25 years.

“We sincerely hope that when the country is celebrating its 100th Independence Day, our Delhi will be 100 percent free from vehicular pollution,” he said, while presenting the budget for the financial year 2021-22 in the Assembly.

(Disclaimer: Additional background information has been added to this PTI copy for context)