Mission 50K-EV4ECO

April 15, 2023

SIDBI has recently launched the pilot version of the Mission 50K-EV4ECO to promote the growth and development of value chain of India’s electric vehicle industry. It is expected to promote EV adoption and strengthen associated infrastructure in the country.

Mission 50K-EV4ECO: Prioritizing EV Ecosystem Development

The project prioritizes the uptake of 2-wheeler, 3-wheeler, and 4-wheeler EVs through direct and indirect lending. The objective of this scheme is to provide access to affordable financing for electric vehicles and to develop charging infrastructure, including battery swapping.

Challenges Faced by MSMEs and NBFCs in the EV Ecosystem

One of the biggest challenges faced by MSMEs and non-banking financial companies (NBFCs) in the EV ecosystem is access to adequate finance, including competitive rates of interest. The bankers perceive EV projects as high risk, which makes it difficult for MSMEs and NBFCs to convince them to lend money for such ventures. Additionally, dedicated NBFCs struggle with the high cost of funds, which results in the ultimate beneficiary paying a high acquisition cost.

Pushing the 3-Wheelers EV Segment

The 3-wheelers EV segment needs to be promoted as it offers the greatest potential for EV adoption in India. Accounting for 79% of passenger road activity, e-2/3Ws are already cost-competitive relative to conventional vehicles. Hence, SIDBI has been advised by NITI Aayog to prioritize this segment in its Mission 50K-EV4ECO scheme.

SIDBI’s National Mission

The Small Industries Development Bank of India (SIDBI) is a government-owned financial institution established in 1990 to support and promote small industries. Over the years, SIDBI has evolved into the principal financial institution for micro, small, and medium enterprises (MSMEs) in India, providing various financial services to help them grow and develop. In line with its national mission, SIDBI has adopted EVs as a priority. The pilot scheme Mission 50K-EV4ECO shall enable quick replicability and scalability through multilateral support. The scheme is the precursor to the EVOLVE scheme by SIDBI-World Bank, which provides better financing terms and other solutions to address the issues faced in the EV ecosystem in India.

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