Accelerated Money For U (AMU) is the first woman-led cleantech financing platform with a specialized focus on the EV ecosystem. The Company has the vision to accelerate financial inclusion in tier 2 and 3 cities via sustainable development and renewable energy adoption in India with sturdy support of technology and industry expertise.
In a recent Interview, Abdullah interacted with Nehal Gupta, Director of Accelerated Money For U (AMU) in which she discussed about EV finance, sustainable mobility, and transportation. The interview delved into strategies for fostering sustainable practices in the transportation sector, spanning finance and environmental impact.
What finance alternatives exist for cleantech electric vehicle (EV) projects, and how can they aid in the shift to sustainable transportation?
With a renewed focus on EV adoption across personal, passenger, and commercial segments of vehicles, the need for timely access to financing is becoming more crucial to realizing the nation’s sustainable mobility vision. To support this drive, more non-traditional finance providers such as fintech firms and NBFCs are joining forces to offer tailored loans to commercial and retail EV consumers at feasible interest rates and loan tenure.
As a result, the EV landscape is witnessing a rise of alternative financing options for cleantech EV projects. For instance, today, cleantech projects can access loans and mortgages at lucrative rates from green financiers, or avail of NBFCs’ help for leasing or debt financing needs to support their EV projects. Similarly, the alternative option of fleet financing is also rapidly gaining ground among cleantech EV companies looking for reliable and feasible funding access.
India has an investment opportunity worth over $200 billion in Indian EV manufacturing, charging infrastructure, and batteries until 2030, and with growing awareness about the lucrative prospect and environmental benefits, entities like Venture Capilatists are showing interest in this space. Typically, VCs with a focus on cleantech and sustainability investments are becoming more forthcoming than traditional VCs who often like to test the water first before investing in new-age green projects.
With these alternative financing options rising to the occasion, they are filling the gap in the funding needs of the cleantech EV projects. This in turn is paving a steady path to a smoother transition to sustainable transportation. As India becomes a leading global EV manufacturing hub across segments, it is likely to attract cleantech funds from global entities. In fact, some reports suggest, the nation can attract cleantech funds of around $180 billion for electric mobility by 2030.
How does cleantech EV finance vary from typical financing approaches, and what specific difficulties does it address?
In my experience, cleantech EV financing is more progressive than traditional financing as it is centered around the noble goals of advancing the world’s sustainability goals and helping it tap into the potential of new-age technology.
One of the basic differences between cleantech EV financing and traditional options is that the former tends to offer longer tenure and simple terms to borrowers to empower them to accommodate the high upfront cost of EVs. Additionally, they often include government-backed incentives or subsidies to boost the use of clean energy.
Even today some financial institutions and banks hesitate to lend funds to EV OEMs and manufacturers and commercial segments as it is likely that they will take more time to underwrite the asset value of this nascent technology to tap into this growing segment. Meanwhile, the cleantech EV financing industry has embraced the role of early adopters and is working to provide more feasible funding options to electric manufacturing and fleet businesses.
By introducing new financing models and tailored options like leasing and subscription-based lending plans, they are helping lower the high upfront cost and manufacturing expenses while allowing cleantech companies to access capital as and when required. Typically, by setting competitive rates for loans and leasing options they are making EV financing more accessible and affordable, in turn, lowering their cost of production. This is directly helping to make EVs more affordable and accelerate their adoption rate among the public. However, I believe the availability of more standardized financing options can help further tackle EV financing challenges down the road.
Could you explain the function of government incentives and subsidies in promoting cleantech EV financing?
India made its stance to support EV adoption clearer in the latest Union Budget by announcing efforts to support the nation’s EV manufacturing capacity and sustainable mobility. Even before the budget announcement, the government has been actively introducing subsidy schemes like FAME II incentives for EVs with substantial kWh rewards and state-issued road tax reliefs to promote EV production and adoption.
Recently, the government introduced the Electric Mobility Promotion Scheme (EMPS) 2024, a subsidy scheme with an outlay of 500 crores to promote the purchase of two-wheelers and three-wheelers. It is expected to lower the cost of manufacturing supporting the nation’s Made in India vision and attracting investments into the industry. Such efforts will not only support EV adoption but also attract substantial investment in the cleantech EV space, which could boost R&D efforts and allow manufacturers to develop premium products at competitive rates. This could further encourage EV financing entities to tap into the nation’s EV potential and innovate financing products to support both manufacturers and buyers.
How does cleantech EV finance affect market adoption rates and the growth of the EV industry?
It is no longer a secret that timely financing in the form of loans and leasing can help manufacturers and fleet buyers reduce their upfront costs significantly. While hasslefree EV finance options attract more EV buyers, they also allow the businesses to allocate more resources towards innovating their product and implementing smarter strategies to bring down unwarranted costs through research and development.
In addition, with the emergence of more cleantech EV financing entities, access to timely capital at lucrative rates is becoming increasingly possible. This allows manufacturers and distributors to scale their production and innovate their offerings without inflating their pricing. As a result, we can now observe consumers gaining access to EVs backed by advanced technology, durable vehicle components, and more innovations in battery technology and safety features without shelling out a huge amount of money. In fact, this combination of quality products at competitive pricing is facilitating adoption rate, and accelerating the growth of the entire EV ecosystem.
How do investors evaluate the risk and return potential of cleantech EV financing possibilities, and what influences their decision-making?
Most traditional investors rely on the borrower’s balance sheet and business fundamentals to evaluate the risk and reward potential. However, the EV industry is still considered to be a nascent investment avenue. This is why investors tend to weigh multiple factors to estimate the financial and environmental risks linked with electric vehicles. For instance, they are likely to weigh factors like the electric vehicle technology’s viability and track record, the estimated demand for EVs in both domestic and global markets, the current and anticipated regulatory norms binding the technology, and more importantly the competitiveness of the domain.
Besides these, investors focused on cleantech space and following a sustainable vision may focus on the sustainability of the business model, the impact of the environment, and scalability amid the rise of other cleantech forces before investing. Today, financing entities can also explore the concept of risk sharing in finance to spread out the risk component of funding nascent industries like EVs among financing partners.
What are the latest trends and breakthroughs in cleantech EV finance, and how are they influencing the future of sustainable mobility?
The cleantech EV financing segment is quite new and is evolving at a rapid rate. This is why I frequently observe new trends coming into play and shaping the financing industry. Recently, some of the key trends in this space would be the rise in competitive financing options for the cleantech industry, especially for utility-scale renewable projects. Similarly, innovative financing models such as personalized lending options, leasing models, and subscription-based borrowing are gaining ground in the EV industry.
I have also noticed an increased inflow of capital towards EV technologies and research especially to support breakthroughs in battery technology and charging infrastructure. As more consumers seek solutions for a range of anxiety issues, the battery and charging segments are likely to attract more investments down the road. This further offers hope for availing more competitive tailored financing options that can help EV manufacturers tap into the demand for these segments.
I feel these new trends and breakthroughs in the financing sector are constantly nudging the industry to seek more tangible innovations to promote the vision of sustainable mobility and make EVs more practical for the masses.
How does the Accelerated Money For U project promote cleantech EV finance, and what particular benefits does it provide to stakeholders?
As a leading cleantech financing company, we aim to fill the gap in EV financing and promote the rate of EV adoption in the country by making them affordable for both manufacturers and retail users. To ensure this we offer tailored solutions in the form of EV leasing, financing, and personal loans for enterprises.
We make sure to offer loans at competitive rates and flexible repayment terms to reduce the burden on borrowers. As a cleantech company, we are also focused on exploring partnerships that will help us streamline financing for EV buyers at various dealerships across the nation.
To enable the borrowers to make the most of our EV financing options while ensuring a hassle-free repayment experience we have digitized our loan processing and collection. In addition, our active collaboration with large payment banks has enabled us to ease repayment through 5000+ banking correspondents in regions where we operate. This has simplified the payment process significantly. Furthermore, to reduce the burden of paying a huge sum at month-end, we have offered EMIs or equated daily installments (EDI) options where borrowers can repay monthly or daily based on their financial standing.
Through our inclusive efforts, we aim to benefit commercial enterprises by developing more efficient products, providing more competitive options to retail buyers, and allowing dealerships to expand their product offerings. I am optimistic that our active approach will help us emerge as one of the most prominent financing leaders by next year.
Could you explain the eligibility requirements and application process for financing under the Accelerated Money For U programme?
We follow a very inclusive approach to ensure consumers from all walks of life can access EVs and support their goals. For instance, we offer tailored financial options to individual owners of electric two-wheelers and even four-wheelers. Similarly, we offer support to felt operators, corporations, FMCGs, OEMs, and third-party logistic providers to support their commercial needs.
To further ensure inclusivity, we follow a very simple and easy to meet eligibility criteria. For instance, any individual between the ages of 18 and 65 can avail of our EV financing facility. However , they would need to fulfill formalities such as complying with our KYC norms, providing required vehicle documents, and installing IoT devices made by our approved vendors to facilitate effective tracking and security. In addition, they need to furnish required documents that serve as proof of their financial standing, identity, and address.
To keep the application process simple, we allow individuals to apply for an EV loan online through our website by filing basic personal and loan-related details. Individuals can also reach out to us through WhatsApp and get their loan-related queries answered.
How do financial institutions and venture capital firms fund cleantech EV ventures, and how do they work with government efforts like as Accelerated Money For U?
Typically, venture capitalists and non-banking financial institutions fund cleantech EV projects through a balanced combination of debt financing and equity. Typically, in the case of equity funding such entities provide access to EV financing in exchange for an ownership stake. However, if one avails of debt financing from NBFCs or VCs individuals have to repay the borrowed sum with interest.
We may often find non-traditional financing working with government bodies. They typically participate in notable clean energy incentive programs or support research and development projects to promote the perks of EVs. They also participate in programs and campaigns to help eligible candidates avail of government grants and subsidies or guide them to leverage cleantech innovations to expand their market presence. For instance, as a debt financing partner, we tend to provide financial help to entities and guide them on how to make the most of the capital to advance their business or commercial vision. Similarly, we frequently launch financial literacy campaigns to help individuals navigate their financial awakening and manage their debt better when embracing new technology or controlling their finances.
What are the long-term implications of cleantech EV finance for environmental sustainability, economic growth, and energy security?
In my opinion, the impact of cleantech EV financing is deep-rooted when it comes to aspects like environmental sustainability, economic growth, and energy security. For instance, EVs are known to emit zero to negligible greenhouse gases than conventional vehicles. So, by financing more such new-age technology, cleantech EV financing entities can help reduce the country’s carbon footprint and drive the nation towards sustainable mobility.
In addition, by providing timely financing aid to EV manufacturing companies and OEMs, cleantech financing firms can boost India’s manufacturing prowess and enhance the nation’s domestic EV market. Such a move would help the industry unleash its potential and allow our nation to emerge as a global manufacturing hub and a lucrative avenue for foreign investors. It will also help create more employment opportunities across the EV segments and strengthen the scope of the industry on a grander scale.
Furthermore, by offering continuous financial support to EV companies, cleantech firms can support their R&D efforts and promote advancements in more renewable energy sources. Such access will help the industry and the nation collectively lower their dependence on fossil fuels and may help build more sustainable choices of energy sources down the road. This is why I believe the implication of timely financing can be multi-fold and as an industry leader, I aim to continue supporting its growth and vision.