🌱 The Business of Green Finance: How Battery & E-Rickshaw Financing Create Profitable Impact

The electric mobility revolution in India is accelerating at an unprecedented pace. With rising fuel costs, government incentives, and growing awareness of sustainability, adoption of electric vehicles (EVs) — especially in the last-mile delivery and passenger mobility segments — is no longer a question of “if” but “when.”

However, one of the biggest roadblocks to large-scale EV adoption is affordability and financing. Drivers in Tier 2/3 cities, who form the backbone of India’s mobility economy, often lack access to formal credit. Traditional banks and NBFCs hesitate to lend due to perceived risk, absence of credit history, and asset repossession challenges.

This is where green financing steps in. At HeyEV, we believe:

Green Finance = Green Profits.

Financing EV assets isn’t just socially impactful; it’s a commercially profitable, risk-managed business model. Let’s break down the unit economics of battery financing and e-rickshaw financing to understand how this works in practice.

🔋 Battery Financing Model

Bill of Materials (BOM with GST applied)

• Battery – ₹36,000 + 18% GST = ₹42,480

• Charger – ₹5,500 + 5% GST = ₹5,775

• IoT Device – ₹4,000 + 18% GST = ₹4,720

• Transportation – ₹600 + 18% GST = ₹708

• Processing Fee – 2% of base (₹36,000) = ₹720 + 18% = ₹850

• Insurance – 1.5% of base (₹36,000) = ₹540 + 18% = ₹637

✅ Total Landed BOM = ~₹55,170

This BOM reflects the true cost of ownership for the financing company. Note that each component is essential: IoT for asset control, processing fees to onboard customers, and insurance to mitigate risk.

Financing Structure

• Customer Price = ₹61,000

• Downpayment = ₹12,000

• Loan Value (LTV) = ₹49,000

• Tenure = 18 months

• Interest Rate to Customer = 17.5% p.a.

EMI & Repayment

• EMI ≈ ₹3,150

• Total Repayment over 18 months = ₹56,700

• Customer Outflow (incl. downpayment) = ₹68,700

This means a driver can access a ₹61,000 battery by paying only ₹12,000 upfront. The financing structure spreads the repayment comfortably over 18 months — ensuring affordability.

Risk Management

Batteries are lower-ticket items with strong collateral value. If a customer defaults:

• The battery can be repossessed within 5 days (thanks to IoT-enabled tracking).

• Redeployment into another vehicle is straightforward and quick.

• Losses are minimized due to strong residual value.

👉 This makes battery financing one of the safest entry products for EV lending.

🚙 E-Rickshaw Financing Model

Cost & Lending Structure

• Customer Price = ₹1,60,000

• Downpayment = ₹20,000

• Loan Value (LTV) = ₹1,40,000

• Tenure = 24 months

• Effective Lending Yield = 31% IRR

• Borrowing Cost (via NBFC credit lines) = 18% IRR

EMI & Repayment

• EMI to Customer ≈ ₹7,900

• Total Inflow = ₹1,89,600 over 24 months

• EMI to NBFC ≈ ₹6,965

• Total Outflow = ₹1,67,160 over 24 months

Profitability Snapshot

• Spread Before Defaults = ~₹22,440 per vehicle financed

• Assuming 10% Default Rate → Profit reduces to ~₹8,440 per vehicle

• Still delivers ~6% net return on deployed loan book

👉 While e-rickshaw financing carries longer tenures and higher ticket sizes, the yields are significantly higher than batteries.

📉 Default & Recovery Landscape

The Indian EV financing market today witnesses:

• ~20% Gross Default (drivers failing to pay EMIs on time)

• ~13% Recovery (repossession + redeployment of assets)

• ~7% Net Default (actual loss to lender)

At HeyEV, our IoT-based asset control, field officer network, and rapid redeployment system are designed to bring defaults closer to ≤10% effective, thereby protecting profitability.

🔑 Strategic Insight: Battery vs. E-Rickshaw

• A battery pack (~₹61,000) is roughly 40% of an e-rickshaw’s cost (~₹1,60,000).

• Batteries act as a gateway product: low ticket size, shorter cycle (18 months), faster churn, and lower repossession risk.

• E-rickshaws provide long-cycle, high-yield opportunities: larger loan books, stronger IRR, and deeper driver engagement.

By financing both batteries and e-rickshaws, lenders can:

1. Create a balanced loan portfolio (low-risk + high-yield).

2. Improve capital efficiency (quick churn on batteries funds longer rickshaw cycles).

3. Maximize impact + profitability at scale.

📊 Comparative Snapshot

Parameter	🔋 Battery Financing	🚙 E-Rickshaw Financing
Customer Price	₹61,000	₹1,60,000
Loan Value (LTV)	₹49,000	₹1,40,000
Tenure	18 months	24 months
Interest Rate	17.5% p.a.	31% IRR effective
EMI	₹3,150	₹7,900
Total Repayment	₹56,700	₹1,89,600
Customer Outflow (incl. DP)	₹68,700	₹2,09,600
Collateral Risk	Low (easy repo)	Medium (vehicle repo slower)
Cost Ratio	40% of E-rickshaw	100% base
Net Profit After 10% Default	Safe, limited impact	~₹8,440 per vehicle (~6% net)

✅ The Big Picture

EV financing in India is not charity. It’s a profitable, impact-first business model that enables livelihoods while ensuring strong investor returns.

• Battery loans → secure, short cycle, quick churn

• E-rickshaw loans → high-yield, longer cycle, scalable

Together, these products create a 40:100 cost synergy, allowing lenders to safely scale green financing portfolios.

At HeyEV, our mission is clear:

Build India’s green financing backbone — making EV ownership affordable for drivers while delivering predictable and high returns for investors.

👉 Green finance is not just about sustainability. It’s the engine powering India’s EV revolution.