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.