In a significant move to boost the local electric vehicle (EV) ecosystem, the state-backed Power Finance Corporation (PFC) has provided a loan of INR 633 crore ($84.7 million) to Gensol Engineering. The loan will be used to procure 5,000 passenger EVs and 1,000 cargo EVs for operations across the Delhi-National Capital Region.
The leased passenger vehicles will be used by Blusmart Mobility, an electric mobility firm. The first set of EVs procured through the loan were flagged off on April 21. These 5,000 commercial EV cars are expected to save 1 Lakh tons of carbon dioxide that would otherwise have been emitted into the environment.
PFC has been exploring opportunities in debt funding of EVs, original equipment manufacturers (OEMs), fleet acquisition, battery OEMs, and EV charging infrastructure to accelerate India’s net-zero goal.
The loan extension is a significant development when EV adoption is increasing in India, backed by state-backed schemes such as the FAME-II scheme and other production-linked incentives for OEMs. Numerous EV startups have emerged in the country, including Ola Electric, Ather Energy, and Ampere Vehicles. Other ecosystem players, such as battery startup Log9 Materials, charging network platform CHARGE+ZONE, and EV financing platform Vidyut, have also entered the market.
The extension of the loan follows the Small Industries Development Bank of India (SIDBI) launching a pilot financing scheme to fund the purchase of 50,000 EVs. As a result, EV sales have risen significantly over the last couple of years, with electric two-wheelers leading the race. Two-wheeler EV registrations grew almost 30% month-on-month (MoM) to 85,683 units in March 2023.
The loan extension is a significant development in India’s EV ecosystem and is expected to encourage the country’s shift towards sustainable transportation. The government’s support, coupled with financing schemes and incentives, is expected to propel the country towards its net-zero goal.