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Electric Vehicle Finance Market Size - By Financial Institution (Bank, NBFC), Vehicle Type (Passenger Car, Commercial Vehicle, Two-Wheeler, Three-Wheeler), Growth Prospects, Regional Outlook & Global Forecast, 2023 - 2032

  • Report ID: GMI7320
  • Published Date: Nov 2023
  • Report Format: PDF

EV Finance Market size

EV Finance Market size was valued at USD 38.8 billion in 2022 and is estimated to register a CAGR of 31.9% between 2023 and 2032. Many governments around the world are introducing incentives and regulatory reforms to encourage the adoption of electric vehicles. For instance, in April 2023, as a crucial component of President Biden's objective to achieve a 50% electric vehicle (EV) market share for new vehicle sales by 2030, the White House unveiled the EV Acceleration Challenge. This initiative involved both public and private commitments aimed at supporting the significant transition to electric vehicles in the U.S.

EV Finance Market

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As stated in The White House Fact sheet, electric vehicle sales have experienced a threefold increase since January 2021, and the count of publicly accessible charging stations has expanded by more than 40%. The nation now boasts an excess of three million EVs on the roads and over 135,000 public EV charging stations. These incentives make electric vehicles more affordable and attractive to consumers, driving demand and, in turn, the EV finance market.

Uncertainty surrounding government incentives and policies could hamper EV finance market growth. Changes in subsidies, tax credits, and regulations can significantly impact the affordability of electric vehicles. Consumers considering EV financing are concerned about potential shifts in these incentives, which could affect the long-term cost-effectiveness of their EV investment, making them hesitant to commit to an electric vehicle purchase.

COVID-19 Impact

The COVID-19 pandemic had a notable impact on the electric vehicle (EV) finance market. Initially, the market experienced disruptions as economic uncertainty and reduced consumer confidence led to decreased EV sales and investment. However, as the pandemic highlighted the importance of sustainability and cleaner transportation, governments and investors redirected their focus toward EVs, leading to increased funding, incentives, and support for the industry, ultimately fueling its recovery and growth.

EV Finance Market Trends

EV-specific financial products could emerge as a prominent trend in the EV finance business. Financial institutions and EV manufacturers are developing specialized financing products tailored to EV buyers. These products may include lower interest rates, extended loan terms, and EV-specific insurance options to encourage more consumers to switch to electric vehicles, thus stimulating market growth.

For instance, in September 2023, L&T Finance revealed its partnership with Ather Energy, an electric vehicle (EV) manufacturer. They jointly announced a financing arrangement that allows customers to receive up to 100 percent financing based on the loan-to-value (LTV) of Ather's vehicles. The loan amount will be determined using the on-road price as a basis and will be subject to variation based on the individual customer's creditworthiness.

Technological breakthroughs and falling costs are among the key factors fostering the adoption of EV finance. The electric vehicle industry has seen significant advancements in battery technology, which have led to increased driving ranges, faster charging times, and reduced production costs.

Quoting an example, in October 2023, Factorial Inc., a notable player in the field of solid-state battery technology for electric vehicles (EVs), announced the shipment of its A-samples of solid-state EV battery cells with a capacity of over 100 ampere-hours to top-tier global automotive OEM partners. These battery cells, which are essential for future large-scale production, have reached a significant achievement by being the first of their kind to pass the rigorous safety assessments outlined in UN 38.3 standards. Factorial's most recent battery cell not only fulfills the performance requirements set by the automotive industry but also represents a significant advancement in terms of safety.

EV Finance Market Analysis

 EV Finance Market Size, By Financial Institution, 2021-2032, (USD Billion)

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Based on financial institution, the market is divided into below bank, NBFC, others. Bank segment is a major contributor to the EV finance industry size through 2032. Banks are the preferred financial institutions for electric vehicle (EV) finance due to their well-established infrastructure and expertise in offering a wide range of financial products. They provide competitive interest rates, flexible repayment options, and expertise in assessing creditworthiness. Additionally, banks have extensive networks, making it convenient for customers to access loans and manage their EV financing. Many banks also offer specialized EV loan programs and incentives, further incentivizing consumers to choose them for EV financing.

EV Finance Market Share, By Vehicle Type, 2022

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Based on vehicle type, the passenger car segment accounted for 40% of the EV finance market share in 2022, due to its potential cost savings and environmental benefits. Electric car offer lower operating costs, reduced maintenance expenses, and access to various incentives, such as tax credits and rebates. Financing options designed for car often include favorable terms, making it easier for businesses to transition to electric fleets. Moreover, as companies prioritize sustainability, EVs align with their eco-friendly initiatives, fostering a positive public image and compliance with environmental regulations.

Europe EV Finance Market Size, 2021-2032 ( USD Billion)

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Europe EV finance market will gain remarkable momentum during the forecast timeline. Stringent emissions regulations and environmental concerns are driving demand for EVs. Various European countries offer substantial incentives, including grants and tax benefits, to promote EV adoption. Besides, countries such as Norway, where EVs constitute a significant portion of new vehicle sales, and Germany's generous subsidies for EV purchases will have a favorable impact on the overall market dynamics. The growth of charging infrastructure and increased availability of EV financing options further contribute to the industry's success in Europe.

EV Finance Market Share

The major companies operating in the EV finance industry are:

  • Ally Financial
  • Bank of America
  • Capital One Auto Finance
  • Citizens Financial Group
  • Ford Credit
  • JPMorgan Chase & Co
  • Nissan Motor Acceptance Corporation
  • PNC Financial Services Group
  • Santander Consumer USA
  • TD Auto Finance
  • Tesla Finance
  • Toyota Financial Services
  • US Bank
  • Volkswagen Financial Services
  • Wells Fargo

Ally Financial and Wells Fargo are the major companies operating in EV finance market. Companies in the market are strengthening their presence by offering competitive interest rates, extended loan terms, and tailor-made financial products. They also collaborate with automakers, expand charging infrastructure, and explore innovative financing models like battery leasing and subscription services to attract and retain customers.

EV Finance Industry News

  • In September 2023, the Commonwealth Bank of Australia (CBA) joined forces with Tesla to provide attractive financing options for electric vehicle (EV) purchases. Under this collaboration, potential buyers can conveniently access CBA's loan choices directly via Tesla's website. The bank is offering a competitive fixed annual interest rate of 5.49%, as stated in an announcement featured on the bank's website. These reduced interest rates are applicable to eligible customers who opt to finance eco-friendly products like electric vehicles and hybrid cars.

The EV finance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD million) from 2018 to 2032 for the following segments:

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Market, By Financial Institution

  • Bank
  • NBFC
  • Others

Market, By Vehicle Type

  • Passenger car
    • Personal
    • Commercial
  • Commercial vehicle
    • Bus
    • Truck
  • Two-wheeler
    • Personal
    • Commercial
  • Three-wheeler
    • Passenger
    • Cargo

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
    • Nordics
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Southeast Asia
    • Australia 
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • MEA
    • UAE
    • Saudi Arabia
    • South Africa


Authors: Preeti Wadhwani

Frequently Asked Questions (FAQ) :

The market size of EV finance reached USD 38.8 billion in 2022 and is set to witness 31.9% CAFR from 2023 to 2032, as many governments around the world are introducing incentives and regulatory reforms to encourage the adoption of electric vehicles.

The passenger car segment held a market share of over 40% in 2022, as electric vehicle (EV) finance is increasingly preferred for passenger car for its potential cost savings and environmental benefits.

Europe market is poised to show tremendous growth through 2032, due to the stringent emissions regulations and environmental concerns that are boosting EV sales, as well as substantial incentives offered by governments, including grants and tax benefits, to promote EV adoption.

Ally Financial, Bank of America, Capital One Auto Finance, Citizens Financial Group, Ford Credit, JPMorgan Chase & Co, Nissan Motor Acceptance Corporation, PNC Financial Services Group, Santander Consumer USA, and TD Auto Finance.

Electric Vehicle Finance Market Scope

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 15
  • Tables & Figures: 180
  • Countries covered: 21
  • Pages: 200
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