AMU’s Nehal Gupta Says Used EV Market Key To CEV Finance

- Advertisement -
- Advertisement -

Unlike the used vehicle market, no market exists for used commercial EVs. The former has been one of India’s biggest vehicle sales enablers. So, what effect can the used-CEV market have on new vehicle sales?

Gurugram-headquartered AMU Leasing is exploring the potential of used/second-hand electric vehicles (EVs) in India. Nehal Gupta, MD, AMU Leasing, and Director, Electric Mobility Financiers Association of India (EMFAI), pointed towards uncertainty regarding the life of used EVs as one of the major roadblocks in the commercial EV finance space.

“We have been working around the commercial EV landscape for a long time now and are sure that the business of second-hand EVs is a major roadblock,” she said.

- Advertisement -

Unlike second-hand vendors and dealers of used cars in India, there practically exists no market for used commercial EVs in the country. The second-hand vehicle market has been one of the biggest enablers of internal combustion engine-powered vehicles.

“The questions we want to answer include what happens to a bad asset (Commercial EV) that has to be collected back from an end-consumer, and how can EVs be given a second dose of life,” she explained.

Not many are currently interested in buying a second-hand commercial EV because of the possible inclusion of added CAPEX to change batteries. She highlighted that unless this problem is solved, commercial EV financing will remain limited to corporations, and small business owners will not open themselves to adopting or experiencing EVs.

For the uninitiated, though commercial electric three-wheelers have become the poster boy of India’s EV adoption, their deployment is still limited to fleet owners and logistics companies.

Also Read: E3W Sales Oct 23: OSM, Altigreen, Euler, Neck To Neck

“Collections and recovery of bad assets as problems, stand as solved. Now, the problem is what to do with recovered commercial EVs,” Nehal said. She added that the cost of battery replacement in commercial EVs is as high as 60%, much larger than down payments made by buyers for sourcing commercial vehicles. Also, the “lease” EV model faces a big challenge when an EV has completed three years and might become “unprofitable” in the long run.

Buyback Guarantee From OEMs

Having financed over 5,000 EVs so far, Nehal believes the CEV finance problem can be solved if the CEV OEMs offer buyback programs. She noted the move would help instil confidence in buyers and financers towards commercial electric vehicles. “The move would show how confident OEMs are with their electric vehicle offerings and encourage organisations like us to push EVs in India aggressively,” she explained.

According to a report by NITI Aayog and Boston Consulting Group, the absence of a holistic EV financing ecosystem is a significant hurdle to the large-scale adoption of EVs in the country. With growing EV adoption, we estimate around Rs 45 to 55 thousand crore will be required to finance EV purchases by 2026.  Currently, around 50% 2W, 90% 3W and 80-90%4W are financed in India. Given the higher upfront cost of EVs, it is even more important to have low-cost financing solutions to make them an affordable substitute for ICE vehicles for the average Indian consumer.

In its EV financing innings so far, AMU Leasing has maintained a healthy NPA rate of below 1%. The biggest challenge in financing batteries for electric rickshaws is the completion of the price difference of over Rs two lakh. However, the price difference of over Rs two lakh is the biggest challenge in financing batteries for electric rickshaws and lithium-ion batteries.

She said, “We are exploring that, but the OEMs need to give us confidence!” AMU is also preparing a tech stack to enable better collections of repayments via new models, including daily and weekly instalments.

If the model of the used CEV market it is working upon works out, the same will include a repair hub that will be used to give a second life to EVs. The same will also be used to retail CEVs collected from defaulters.

- Advertisement -

Related Artcles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Exclusive

Europe

European Car Market’s Best Post-Pandemic Year, Driven By 2 Million EVs

0
In 2023, Tesla surpassed Nissan and Volvo as battery-electric vehicles (EVs) neared the sales of diesel cars. For the first time in Europe, EV...

Global EV Sales: 69% Annual Increase, 26% Monthly Decrease – Rho Motion

0
In January, sales of fully electric cars and plug-in hybrids reached 1.1 million, an increase from 660,000 in January 2023. In January, global electric vehicle...

India Shifts Towards Expensive Smartphones, Market Stabilised With 2% YoY Decline In 2023

0
The Indian smartphone market is expected to grow by 5% for 2024, driven by 5G adoption and device upgrades. India's smartphone market experienced a slight...

Buzz

AI

Big Techs Collate To Protect Elections From AI Deception

0
The signatories of the tech accord include OpenAI, Microsoft, Adobe, and social media platforms like Meta Platforms, TikTok, and X. On February 16, a coalition...

CERC Issues Tariff Regulations For Renewable Energy Sources

0
The regulations empower CERC to relax provisions under special circumstances and address implementation difficulties. The Central Electricity Regulatory Commission (CERC), using its authority under the...

Tata Group On Partnership Lookout For Dholera Plant, Could Be UMC Or PSMC

0
The plant will start with initial capacity of 25,000 wafers per month, to 700-1,000 semiconductor chips per day at full efficiency. The Tata Group is...

Important Sectors

With Electric Vehicles, The Vehicle Service Industry Will Undergo The Biggest Disruption

0
With electric vehicles (EVs) becoming mainstream in India, how is the vehicle service sector responding? As this sector employs a large fraction of individuals...

CERC Issues Tariff Regulations For Renewable Energy Sources

0
The regulations empower CERC to relax provisions under special circumstances and address implementation difficulties. The Central Electricity Regulatory Commission (CERC), using its authority under the...

Tata Group On Partnership Lookout For Dholera Plant, Could Be UMC Or PSMC

0
The plant will start with initial capacity of 25,000 wafers per month, to 700-1,000 semiconductor chips per day at full efficiency. The Tata Group is...

Indian Govt Announces Two Multi-Billion Dollar Semiconductor Plants

0
India aims to further its success in electronics manufacturing, targeting $300 billion by 2026-27 The government has received four proposals for semiconductor manufacturing...

Applied Ventures Invests In VVDN Technologies To Boost Semiconductor Ecosystem

0
The investment underscores Applied Ventures' dedication to nurturing innovation, collaboration, and entrepreneurship within the semiconductor and electronics manufacturing landscapes. Applied Ventures, LLC has announced a...

Manufacturing

BorgWarner Produces E-Motor Parts For Chinese Automaker

0
In January 2024, production started for use in XPeng's X9 MPV; stator winding technology provides exceptional power density and efficiency, while oil cooling enhances...

Volkswagen Group And M&M Ink Supply Deal For MEB Components

0
The agreement includes the provision of specific electric components and unified cells. Volkswagen Group and Mahindra & Mahindra (M&M) have finalized the first supply agreement...

ZF Launches TN plant, Eyes EV Growth And Exports; Plans INR 1800 Cr Investment

0
The Oragadam facility marks ZF's 19th in India and 10th in TN, with 80% of its workforce expected to be women. In the first...

StoreDot’s Fast-Charging Cells Hit 100 Miles In 4 Minutes

0
StoreDot achieved its '100in4' goal ahead of schedule in early prototype tests through a series of cell improvements, enabling extremely fast charging with existing...

CG Power, Renesas, And Stars Microelectronics To Establish Chip Plant In India

0
The Murugappa Group, a new player in the Indian electric vehicle (EV) market and based in Chennai, stands to gain from the internal provision...