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Time of India
18-07-2025
- Automotive
- Time of India
Startups and Financiers rethink EV funding models for commercial adoption in India
A new ecosystem of startups and financial institutions is emerging to address the unique challenges of financing electric commercial vehicles (EVs) in India, as the segment moves from niche to scalable, according to a report by The Times of India . Traditionally considered too risky by mainstream lenders, the commercial EV market is now seeing innovative financing structures tailored to the needs of small fleet operators and individual buyers—many of whom lack formal credit histories. Among the most significant changes are battery subscription models , flexible EMI plans based on vehicle usage, and first-loss guarantee (FLDG) arrangements with non-banking financial companies (NBFCs). These models aim to align financing terms with the operational and cash flow realities of EV ownership. Changing dynamics for startups Startups like VidyutTech are pioneering a separation of battery and chassis financing. "In an internal combustion engine (ICE) vehicle, fuel is a recurring expense. In an EV, the battery—comprising 30–40 per cent of the vehicle cost—is essentially prepaid fuel," explained Xitij Kothi, co-founder of VidyutTech. The company offers fixed EMIs for the chassis and a per-kilometre charge for battery usage, mimicking fuel payment patterns and reducing upfront costs. Lenders such as Mufin Green Finance are also shifting focus. With an asset under management (AUM) of ₹1,100 crore, the company has deployed more than ₹800 crore into EV financing , largely for battery-specific loans. "Many customers pay upfront for the vehicle body and finance just the battery," said Dhiraj Agrawal, Chief Business Officer at Mufin. Its battery loan book currently stands between ₹70–80 crore and is expected to expand as adoption grows. Flexible, usage-based EMI models are helping drivers with irregular incomes stay current on payments. "About 35–40 per cent of our customers have no formal credit history," said Kothi. "We rely on physical verification, co-applicants, and viability assessments before extending loans." To de-risk such lending, many startups are also entering FLDG partnerships with NBFCs—absorbing part of the default risk to encourage lenders to support newer borrower profiles. As these models gain traction, experts believe they could significantly broaden access to commercial EVs, particularly among small fleet operators and independent drivers, further accelerating India's transition to cleaner transportation .
Time of India
17-07-2025
- Automotive
- Time of India
Battery loans: New age EV financiers charge up
A new wave of startups and financiers is reshaping how electric commercial vehicles (EVs) are funded in India, as early signs of scale emerge in a segment once seen as too niche or risky for institutional capital. From battery subscription models to flexible EMIs and first-loss guarantee partnerships , lenders are adapting financing structures to match the economics of EVs and the credit realities of small commercial operators . Innovative approaches now cater to EV-specific needs. Some lenders offer battery subscriptions, allowing buyers to pay per use-like fuel-instead of bearing the entire upfront battery cost. Others provide flexible EMIs that vary based on vehicle usage, easing repayment stress for driver-owners with variable incomes. Additionally, several startups are partnering with NBFCs through first-loss guarantee (FLDG) structures, where startups cover a portion of defaults, helping de-risk lending to customers without formal credit histories. At the forefront is VidyutTech , which separates EV chassis and battery financing. "In an ICE vehicle, fuel is an operating expense. But in an EV, the battery-30-40% of the vehicle cost-is prepaid fuel. "This shifts the depreciation curve and risk," said co-founder Xitij Kothi. Vidyut offers fixed EMIs for the vehicle and per-kilometre battery charging. Mufin Green Finance , managing an AUM of Rs 1,100 crore, deployed over Rs 800 crore in EV financing , much of it focused on battery-only loans. "Many buyers pay upfront for the vehicle and finance only the battery, which is 30-40% of the cost," said chief business officer Dhiraj Agrawal. Mufin's battery finance portfolio stands at Rs 70-Rs 80 crore and is expected to grow as this model gains traction. Pay-per-use structures address key ownership anxieties for EV buyers, especially individual drivers. "About 35-40% of our customers have no formal credit history. We do physical verification, involve co-applicants, and assess viability before underwriting," said Kothi.
Time of India
17-07-2025
- Automotive
- Time of India
Battery loans: New age EV financiers charge up
Representative image BENGALURU: A new wave of startups and financiers is reshaping how electric commercial vehicles (EVs) are funded in India, as early signs of scale emerge in a segment once seen as too niche or risky for institutional capital. From battery subscription models to flexible EMIs and first-loss guarantee partnerships, lenders are adapting financing structures to match the economics of EVs and the credit realities of small commercial operators. Innovative approaches now cater to EV-specific needs. Some lenders offer battery subscriptions, allowing buyers to pay per use-like fuel-instead of bearing the entire upfront battery cost. Others provide flexible EMIs that vary based on vehicle usage, easing repayment stress for driver-owners with variable incomes. Additionally, several startups are partnering with NBFCs through first-loss guarantee (FLDG) structures, where startups cover a portion of defaults, helping de-risk lending to customers without formal credit histories. At the forefront is VidyutTech, which separates EV chassis and battery financing. "In an ICE vehicle, fuel is an operating expense. But in an EV, the battery-30-40% of the vehicle cost-is prepaid fuel. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like No annual fees for life UnionBank Credit Card Apply Now Undo "This shifts the depreciation curve and risk," said co-founder Xitij Kothi. Vidyut offers fixed EMIs for the vehicle and per-kilometre battery charging. Mufin Green Finance, managing an AUM of Rs 1,100 crore, deployed over Rs 800 crore in EV financing, much of it focused on battery-only loans. "Many buyers pay upfront for the vehicle and finance only the battery, which is 30-40% of the cost," said chief business officer Dhiraj Agrawal. Mufin's battery finance portfolio stands at Rs 70-Rs 80 crore and is expected to grow as this model gains traction. Pay-per-use structures address key ownership anxieties for EV buyers, especially individual drivers. "About 35-40% of our customers have no formal credit history. We do physical verification, involve co-applicants, and assess viability before underwriting," said Kothi. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
