India’s EV transition has built supply through subsidies, schemes and manufacturing incentives, but buyer confidence remains weak.
The biggest unresolved question for many EV buyers is not only charging, but what the vehicle will be worth in three to five years.
Amp EV and Arc Electric offer financing models that shift resale and battery-risk away from individual buyers and fleet drivers.
The piece argues that India may not need another EV subsidy as much as institutional risk-bearing, a secondary market and a statutory right-to-charge framework.
Despite being a strong advocate for EVs, I bought my father a petrol hybrid a few years ago. Not because I doubted the cost or climate case for electricity, but because I could not answer two questions he asked me: where will I charge it in our village in Konkan, where power cuts are frequent, and who will I sell it to when I want to upgrade?
Delhi is not very different. Ask a room of policymakers, regulators and industry leaders invested in India’s EV transition how many own one, and barely a few hands go up. Meanwhile, the petrol hybrid is no longer the safe bet it once was, with E20-linked mileage drops, repair costs and warranty disputes weakening confidence in ICE vehicles too.
At the centre of this sits one unresolved question: what will an EV be worth in three to five years? Until banks, financiers and buyers can price residual value, battery health and second life, adoption will remain capped. India has built the supply side through subsidies and schemes, but what it has not built is buyer confidence.
Two financing models, Amp EV for individual buyers and Arc Electric for commercial fleet drivers, have independently arrived at versions of the same answer. If nobody can tell a buyer what their EV will be worth in five years, design the transaction so the buyer never has to ask. Both show what is possible without a new government scheme, and both are, by design, replicable.
Amp EV’s starting premise is that India’s EV ecosystem has been built largely for supply: government schemes, OEM roadmaps and battery manufacturers. Demand has been the missing half. A vehicle purchase is not a spreadsheet decision. It rests on two questions every Indian buyer asks, regardless of fuel type: what is the mileage, and what will I get back when I sell it? My father asked me the second one, and I had no answer.
The barriers facing ordinary buyers show up in small arithmetic. Installing a charger in a Resident Welfare Association-managed parking spot in Delhi costs roughly Rs 40,000. That same spot, leased commercially, could fetch close to Rs 1.5 lakh a month. The incentives facing an RWA committee and an EV-owning resident point in opposite directions. No awareness campaign changes that arithmetic.
This mismatch decides whether EV ownership stays the preserve of early adopters with private parking, or becomes accessible to the apartment-dwelling middle class that makes up much of urban India’s vehicle market.
Amp EV’s response to the resale problem is structural. The company places an electric vehicle on the balance sheet of a small or medium enterprise, structured as an operational lease under Section 32 of the Income Tax Act. The MSME claims a depreciation benefit it was already entitled to, on an asset it neither maintains nor worries about reselling. That vehicle is then leased to a salaried individual with no down payment and no responsibility for charging infrastructure, total cost of ownership or resale. The individual simply drives the car.
This is not theoretical. Amp EV has closed a deal with a large multinational employer to issue 500 electric vehicles to staff over two quarters under this structure. The logic also scales beyond multinationals. Corporate lease plans in India have existed mostly for the top 1 per cent of companies, because the depreciation economics worked only at that scale.
The company’s stated direction — bundling finance, subscription, insurance and resale into one offering — points to the missing piece policy has not addressed: an institutional secondary market for EVs. Once an MSME exhausts the depreciation benefit on a leased vehicle, it can be resold to another MSME as a pre-leased asset. A resale market gets built this way, through institutional owners for whom depreciation is a tax asset rather than a loss.
If Amp EV addresses the salaried buyer, Arc Electric addresses the segment for whom an EV is not a household asset but a livelihood: the driver-owner on a fleet aggregation platform.
For this buyer, the deciding factor is not only upfront cost but what happens after four years: the rent reduction a driver can expect, and what the vehicle will be worth at resale against an equivalent petrol or CNG vehicle. For EVs today, the honest answer is worse than for an internal combustion engine vehicle. That is why many driver-owners continue to choose petrol or CNG as their first vehicle, even as EV sales across the industry grow at roughly 25 per cent a year.
The battery accounts for about 60 per cent of an EV’s cost, and almost all the uncertainty in its resale value. Arc Electric’s fix is to separate the two: a battery-as-a-service subscription that guarantees performance over a 10- to 15-year horizon. The driver is no longer absorbing battery degradation as part of resale value. Once the most expensive and least predictable component is contractually insulated, the total cost of ownership looks different, both for the driver and for the non-banking financial company underwriting the loan.
Fleet financing decisions are driven by the driver-owner’s financial profile rather than the vehicle’s fuel type. The segment with the highest daily mileage, and therefore the greatest emissions payoff, also has the thinnest credit history. Any fix that does not address this credit gap will struggle to move adoption beyond early adopters.
Arc Electric’s case also extends into policy. Treating EV procurement as a quarterly ESG metric for large corporates and government bodies would turn the 30 per cent commercial fleet electrification ambition into something boards review regularly. Credit rating-linked incentives would make EV lending cheaper to originate under ESG loan frameworks, not just cheaper to repay.
These two models show how the market adapts when policy clears a path. Both suggest that the resale-value problem, one of the biggest barriers to EV adoption crossing into double digits, can be addressed through financial restructuring rather than fiscal subsidy alone. Section 32 depreciation, operational leasing, subscription contracts and ESG-linked lending are not new instruments. What was missing was someone willing to restructure who bears the risk.
But the limits of private innovation are also visible. Amp EV needs MSMEs willing to take EVs onto their balance sheets, which requires tax clarity from the Central Board of Direct Taxes. Arc Electric needs NBFCs to treat a battery subscription as bankable collateral, which requires recognition from the Reserve Bank of India and ESG rating agencies.
A third gap sits outside both models: financing for charging infrastructure. Neither model fully addresses who pays for the charger, wiring and connection that both quietly assume will be there. India already has two EV-specific tax levers, Section 32 and Section 80EEB for individual loan interest, but neither touches the charging point. A charging operator typically needs five to 10 years to break even on a sub-7kW charger, but can often secure land leases for only one to three years.
Both models ultimately depend on resolving the RWA charging problem, which no financing structure can engineer around. A right-to-charge framework with statutory backing, not a guideline RWAs can ignore, would do more to help these models scale than another FAME-style subsidy.
The test for policymakers is not whether these two models succeed commercially. It is whether the mechanisms they have identified — institutional risk-bearing for resale value, and decoupling the battery from the vehicle — get codified into a template any financier, MSME or aggregator can use.
An electric vehicle becoming the first vehicle a household or driver ever owns, rather than the second, is the number 10 years of incentive spending has not moved. My father’s two questions — where to charge and who to sell to — are the same questions every prospective Indian EV buyer is silently asking. These models suggest the answer may not need a new incentive at all, only someone other than the buyer willing to hold the risk.