Fueling green mobility through fintech: the next growth engine for India

Time of India

13 hours ago

India is at a critical turning point as it moves towards sustainable mobility. Electric vehicles (EVs) are gaining popularity in urban India; however, the green revolution's true reach depends on success in non-metro cities. Fintech is a game-changing catalyst that can make EVs affordable and accessible to people across various socio-economic segments.
EV affordability remains a barrier in tier 2/3 markets
Despite increased electric two-wheeler sales and a 15-20% price reduction in the last two years, affordability is still a hurdle to mass adoption in smaller cities and towns. Electric two-wheeler sales in FY2024 were at 1.14 million units, recording a 33% year-on-year growth and accounting for 59% of India's EV market . However, this expansion is mostly urban-based, indicating the potential to tap non-metro cities.
The typical electric scooter remains priced at ₹80,000-₹1,20,000, which remains a financial task for families with an income of ₹25,000-₹40,000 per month. This hurdle is further magnified by the non-formal nature of work in these marketplaces—gig workers, small merchants, and delivery partners who would gain most from electric mobility have little or no credit history or document proof of income to qualify them for credit from formal sources. Digital lending platforms are filling this gap with flexible, instant, customized credit offerings.
How co-lending with OEMs brings down barriers
One of the notable innovations in EV financing has been the development of co-lending alliances between original equipment manufacturers (OEMs) and fintech firms.
These strategic partnerships are essentially redefining the economics of electric vehicle ownership through risk-sharing, processing time reduction, and bundling financing as an integral part of the buying process by making electric vehicles affordable to first-time buyers.
For example, joint ventures between OEMs such as Tata Motors and financial institutions like the State Bank of India provide up to 90% financing of the on-road price with loan tenures going up to six years. Fintechs now have the chance to take this model deeper into underserved markets using digital tools.
These alliances lower the cost of capital and link financing at the time of purchase, making it easy for consumers in Tier 2 and 3 cities to buy.
Alternative credit scoring and embedded finance: Game changers
The evolution of credit evaluation methodology is a promising innovation in EV financing. Traditional credit scoring models, which rely heavily on formal banking relationships and documented income, leave behind millions of potential customers who maintain healthy financial lives through digital payments, utility bill payments, and informal savings mechanisms.
Fintech lenders use alternative sources of data, such as UPI payment patterns, mobile wallet usage, bill payment history, and even social media usage, to create holistic creditworthiness profiles. This has made it possible to lend responsibly to underserved segments.
Embedded finance platforms have simplified the customer experience by packaging credit approval, insurance, and post-sale services under a single digital window. Real-time Aadhaar-based KYC processes coupled with instant disbursal capabilities have reduced the average financing period from weeks to hours. Tailored EMI plans, such as seasonal payment schemes for farmers' communities and flexible payment cycles for gig economy workers, have democratised electric mobility across various economic segments.
Fintech as a catalyst for India's net-zero goals
India's target of becoming net-zero by 2070 marks the need to shift to electric mobility. Fintechs are essential for this transformation, offering inclusive and digitally-enabled retail green finance solutions. Their adaptable systems and data competencies place them in an advantageous position to monitor, report, and improve the environmental efficiency of their lending portfolios.
Through enabling EV adoption in all income classes and geographies, fintechs play a direct role in curbing fossil fuel dependence and city emissions, keeping with India's sustainability mission.
A digital roadmap to green inclusion
The intersection of fintech and electric mobility is not a technological driver but a socio-economic necessity. By breaking affordability hurdles, using alternative credit scoring, and promoting strategic alliances, fintechs are opening up green mobility to the masses. The journey to India's ambitious goal of 30% EV penetration by 2030 passes through Tier 2 and Tier 3 markets, where innovative fintech solutions are poised to become the prime driver of inclusive green mobility.
The next phase of growth will require continued innovation in credit assessment, deeper integration with EV ecosystems, and expansion into adjacent services like charging infrastructure financing.
India's green mobility shift starts in tier-2 and 3 towns, and not just boardrooms. Fintechs can drive it with smart credit, EV access, and bold partnerships. But scaling needs policy support, infrastructure, and collective will.