Govt plans institution to fund businesses focused on electric vehicles: Gadkari

The global electric vehicle market size is projecting to grow from 4,093 thousand units in 2021 to 34,756 thousand units by 2030, at a CAGR of 26.8 per cent. Factors such as rising demand for low emission commuting and governments supporting long-range, zero-emission vehicles through subsidies & tax rebates have compelled the manufacturers to provide electric vehicles around the globe. It has resulted in an increased demand on the market for electric vehicles.

India has been steadily increasing its usage of electric vehicles. The government, on the other hand, is making every effort to hike EV sales. The second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) programme has already begun, with some extra incentives is being provided to EV purchasers. In addition to subsidies and incentives, the government intends to establish organisations to fund EV firms.

Insights 

According to a recent report, the Electric vehicle financing industry of India is expecting to be worth Rs 3.7 lakh crore by 2030, accounting for roughly 80% of the current retail vehicle finance industry. On Thursday, Nitin Gadkari, who addressed the India Global Forum 2021, said that the government plans to encourage electric vehicles for construction equipment and promises to encourage them. Gadkari said that the government is trying to reduce electric vehicles costs to make them more affordable. "Domestic demand for electric vehicles is enormous. Many companies have begun to produce electric vehicles", He said.

Official Statements by Nitin Gadkari

“The government is planning to set up an institution to fund businesses with a focus on electric vehicles and facilitate new financial instruments for lending to the public transportation and commercial vehicle segments”, Gadkari said on Thursday. Nitin Gadkari, the Union minister, continued that the government places a high priority on supporting electric vehicles in India. He further added, "The electric vehicle sector in India is rapidly expanding. The government is assisting domestic electric vehicle manufacturers ".

The report 'India Electric Vehicle Financing Mobilization', prepared by Niti Aayog and the Rocky Mountain Institute (RMI), concludes that end-users face various challenges like high-interest rates, high insurance rates, and low loan to value relationships. "The government plans to set up a financial facility to finance the electric vehicle business and facilitate new financial instruments for public and commercial vehicle lending", he added.

The reason behind taking these steps

This action has been taking to promote and encourage more institutes to get involved in the automotive industry. It will apply not just to EV automakers but also to makers of components utilised in the production of EVs. The benefits will pass on to companies involved in the establishment of an EV charging network. 

Furthermore, Gadkari said that the cost value of the battery is 50% of the price of an electric vehicle and Indian research institutions are working on alternative battery technology for such electric vehicles to bring down the cost of electric vehicles in the country. "Electric vehicles are in high demand in the United States. Many startups have begun to produce electric vehicles", He stated.

The Minister noted that India is struggling with pollution due to imports of petroleum products. "We are going to use solar power to charge the batteries in electric vehicles," Gadkari stated, adding that 69,000 gas stations currently have to charge facilities for electric vehicles.

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