Can fintech fix India's EV resale and financing woes

Time of India

12 hours ago

India's electric vehicle (EV) dream will not fail because of poor engineering or weak demand. It will fail if buyers cannot get a fair loan today and a fair resale tomorrow. You can design the most energy-efficient EV with swappable batteries and advanced digital dashboards, yet if a buyer cannot secure affordable financing or recover value when they sell, the promise of sustainable mobility collapses into a financial dead end.
The challenge is no longer about product development. It is about trust. And for many financiers, it is about a reluctance to embrace change. Most lenders hesitate to underwrite EVs because the vehicles themselves are still unfamiliar territory. Bridging that trust gap is where fintech can play a decisive role.
The real bottleneck: Residual value & risk
Most lenders in India still underwrite the borrower, not the vehicle, because there is no reliable way to measure battery health, range degradation, or residual value. To many, the EV remains a black box. When risk is unclear, the cost of capital increases.
Non-banking financial companies raise interest rates. Loan-to-value ratios fall. Insurance premiums become uncertain. Resale pricing is often little more than guesswork scribbled on the back of an envelope. This is not a model that can support mass-market adoption. In mature automotive markets, the used vehicle segment is often larger than the new vehicle segment, creating liquidity and confidence.
In India, the
used EV market
is still undeveloped, with no consistent pricing, no widely trusted battery certification, and very limited financing options.
Early adopters who purchased EVs three to five years ago are ready to upgrade, but many are stuck. Potential buyers are wary of used EVs, dealers lack a pricing framework, and banks often refuse financing unless backed by significant collateral or a personal guarantee.
The EV economy needs fintech companies to do what legacy players have not done: measure the right metrics, quantify the risk, and enable resale liquidity. The next wave of EV adoption in India will not be written only in kilowatts and subsidies. It will be shaped by algorithms, battery scores, and integrated resale platforms. A trust infrastructure built on reliable data is essential.
Battery health scoring systems must emerge as industry benchmarks, functioning much like a credit score, to reveal the true remaining useful life of an EV. Artificial intelligence-led residual value prediction models should give financiers the confidence to structure loans for used EVs.
Pricing on dealer and buyer platforms must be dynamic and transparent rather than speculative. Underwriting frameworks should extend beyond borrower credit history to incorporate telematics, charging behaviour, and maintenance records, enabling far more accurate asset valuation.
Original equipment manufacturers have historically paid little attention to the used market. Margins are thinner, customers are less predictable, and revealing real-world battery degradation data can create commercial risks. While manufacturers hold vast amounts of performance data, they are often unwilling to share it, citing intellectual property and competitive concerns. Even when data is provided, it may be incomplete, inconsistent, or framed in ways that downplay product limitations. Without transparent and standardised data, the resale market cannot mature, and financing will remain restrictive.
It is unlikely that manufacturers or the government will solve this challenge on their own. The real opportunity lies with fintech companies and independent platforms that have the incentive and agility to create transparent, standardised systems for valuing EV assets.
The next wave of solutions will include battery analytics that are accessible to consumers, dealers, and financiers, marketplaces that integrate health scores with instant resale and financing options, and insurance or loan products priced according to actual asset condition rather than broad assumptions. If India is to truly democratise EV adoption, batteries must stop being treated as proprietary secrets and start being recognised as valuable assets.
The next chapter of fintech innovation will focus less on payments and lending, and more on building trust frameworks for the assets of tomorrow. In the EV industry, the player that can make battery risk visible and resale liquidity possible will not just lead the market — they will decide its future.