Electric vehicles (EVs) are becoming increasingly popular as people look for ways to reduce their carbon footprint. With the government pushing manufacturers to produce EVs in India, it is also encouraging buyers with various schemes for increasing the adoption rate of EVs in India. If you’re considering buying an EV, you may be wondering what financing options are available to you? Here we are to help you with your query, where we list some ways you can get EV loans in India.
Government-Sponsored Loan Programs
As the Government is pushing the EVs ahead in the Indian automobile scenario, it provides various schemes for the buyers to take advantage of. One such scheme is the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME India) scheme. The scheme provides incentives for EV buyers in the form of subsidies on the purchase price of the vehicle. The subsidy amount varies depending on the type of vehicle and its battery capacity.
Apart from FAME India, individual states in India have their own EV policies aimed at promoting the adoption of EVs. These policies offer incentives such as tax exemptions, registration fee waivers, and subsidies on the purchase price of EVs.
For instance, Gujarat’s EV policy offers incentives such as exemption from road tax and registration fees. Delhi’s EV policy offers incentives such as waiving road tax and registration fees for the first 1,000 electric two-wheelers purchased monthly. Rajasthan’s EV policy offers incentives such as a 100% exemption on road tax and registration fees for electric vehicles.
While there are no major conditions as a part of the eligibility criteria to avail of the FAME subsidy, there are some things to keep in mind:
- You must have a valid ID proof.
- You must have never claimed a FAME II subsidy before for electric two-wheelers.
- The name provided during the registration must exactly match the name on the ID proof.
Banks in India offer loans for electric vehicles (EVs) just like they do for other vehicles. The interest rate for electric vehicle (EV) loans in India varies depending on the bank and the type of loan. For example, HDFC Bank offers an electric vehicle loan with interest rates starting at 7.50%. The Union Bank of India offers an EV loan at an interest rate of 7.40% for four-wheelers and 9.90% for two-wheelers. These interest rates are based on data from last year.
The eligibility criteria for loans for EVs in India varies depending on the lender. For example, HDFC Bank’s new EV Car Loan can be availed by salaried individuals in the age group of 21 to 60 years (at the end of the tenure), self-employed individuals in the age group of 21 to 65 years (at the end of the tenure), partnership firms, public and private Ltd. companies. This data is in accordance with the information provided on HDFC’s own website.
Non-Banking Financial Companies (NBFCs)
Then, some NBFCs provide EV loans in India. One of the latest NBFCs to enter this space is LoanTap Financial Technologies Private Limited. The company has joined forces with Mufin Green Finance Limited to accelerate the growth of electric two-wheeler financing in India. LoanTap gives you options to choose from amounts ranging from Rs 20,000 to Rs 2,00,000 based on your requirement for electric two-wheeler loans.
NBFCs such as Manappuram, Vedika Credit Capital, Cholamandalam, and Greaves Finance have partnered with vehicle manufacturers to provide their consumers with affordable financing options.
The interest rates for EV loans from NBFCs in India also vary from lender to lender. The eligibility criteria also depend on the lender. In the case of LoanTap, basic eligibility criteria include:
- Individuals with a minimum monthly income of INR 10,000
- Indian citizens/residents who are 21 years and above
Manufacturer tie-ups with financial institutions are also a major way for consumers to avail lucrative offers on the purchase of EV loans. For instance, Okaya EV recently announced a tie-up with 12 financial institutions to provide attractive financing schemes to customers.
The company has partnered with HDFC, Axis, IDFC, Loan Tap, Bike Bazaar and more to promote its two-wheeler EV lineup. Okaya says the tie-ups and a simplified financing procedure will help make for a smooth and quick loan approval process.
As a part of the tie-up, interest rates start from 5.99 per cent, and buyers also get the option of zero down payment, zero processing fees and a flexible term of up to 48-month loan window for both their low and high-speed electric vehicles. Okaya claims that the loan approvals will be provided in only 30 minutes.
Earlier in June this year, Tata Motors partnered with HSBC Bank to offer financing solutions to corporate employees. Under the partnership, consumers with a salaried account with HSBC India can apply for a tailor-made loan to purchase an electric vehicle from Tata Motors’ EV lineup.
Furthermore, the customers will be able to apply for a loan with zero down payment, no hypothecation, low processing fee and no documentation charges, among others. Buyers who avail of the loan will also get a special accessory kit for the EV purchased from the automaker.
A bunch of other tie-ups have also taken place in the past, such as those with Axis Bank, Greaves Electric Mobility, and more.
So, these were your financing options available for EV loans in India. While interest rate and eligibility criteria depend on bank to bank or NBFC to NBFC, do keep in mind to check out the terms and conditions sheet so you are making an informed purchase. Loan repayment terms are also mentioned in the sheet, which again depends on the duration and amount of your loan.