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The government is planning to set up an institution to fund businesses with a focus on electric vehicles as well as facilitate new financial instruments for lending to the public transportation and commercial vehicle segment, Union minister Nitin Gadkari said on Thursday.

Addressing the India Global Forum 2021, Gadkari also said the government is planning to bring incentives for construction equipment vehicles to encourage them to become electric ones.

According to a recent report, India’s electric vehicle financing industry is projected to be worth Rs 3.7 lakh crore in 2030, which would be about 80 percent of the current retail vehicle finance industry.

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

“The government is planning to set up a financial institution to fund business with a focus on electric vehicles and facilitate new financial instruments for lending to the public transportation and commercial vehicle segment,” he said.

Gadkari, who is the road transport and highways minister, noted that the government is giving highest priority for electric vehicles adoption in India.

“India’s electric vehicles sector has been growing rapidly. The government is supporting domestic electric vehicle manufacturers,” he said.

Further, Gadkari pointed out that battery cost is 50 percent of an electric vehicle and India’s research institutions are working on an alternative battery technology for such vehicles.

“We have huge domestic demand for electric vehicles. Many startups have started producing electric vehicles,” he said.

The minister noted that due to import of petroleum products, India is facing problems of pollution.

“We will use solar energy for charging batteries of electric vehicles,” Gadkari said, adding that currently, 69,000 petrol stations have electric vehicle charging facilities.