The Ultimate Guide to EV Financing in India (2025)

Introduction

The electric vehicle revolution in India is no longer a distant promise; it’s a present-day reality. With sales crossing the two-million-unit mark in FY2025, a 15.6% year-over-year growth, the hum of electric motors is becoming a familiar sound on our roads. The engine powering this transition, however, is not just electric—it’s financial. The EV financing market is projected to skyrocket from USD 2.37 billion in 2025 to nearly USD 20 billion by 2030, a staggering growth of over 53% annually.

This explosive growth has given rise to a complex and dynamic ecosystem of lenders. The choice is no longer limited to your local bank branch. Today, a prospective EV buyer must navigate two distinct worlds: the established, trust-based realm of traditional banks and the agile, specialised domain of disruptive financial technology (fintech) startups. This guide is designed to be your definitive map, providing a comprehensive overview of every available option, demystifying key financial terms, and offering strategic insights to help you choose the perfect financing partner for your two-wheeler, three-wheeler, or four-wheeler EV.

Chapter 1: Financing Your Four-Wheeler EV

For most consumers, the journey into EV ownership begins with a four-wheeler. This segment is fiercely competitive, with both public and private sector banks offering dedicated “Green Loan” products to attract customers.

Public Sector Banks (PSBs): These institutions are the traditional stalwarts, often competing on the basis of trust and the most attractive interest rates.
- State Bank of India (SBI): SBI’s Green Car Loan offers rates ranging from 9.10% to 10.15%.
- Punjab National Bank (PNB): PNB’s Green Car (E-Vehicle) Loan provides a 0.05% discount over its regular auto loans and often features nil processing and documentation charges.
- Union Bank of India: The Union Green Miles scheme is another competitive option, with rates starting as low as 8.20%.
- Indian Overseas Bank (IOB): IOB is frequently one of the most competitive lenders, with EV loan rates starting from 8.15%.
Private Sector Banks: These banks compete on speed, digital convenience, and flexible financing options.
- HDFC Bank: Known for its quick processing, HDFC Bank offers EV loans with rates from 9.20% p.a. and provides up to 100% financing on select models with tenures of up to 8 years.
- ICICI Bank: A strong digital player, ICICI Bank offers competitive rates starting from 9.10% p.a. and also provides up to 100% on-road funding for certain vehicles.

Master Comparison Table: Four-Wheeler EV Loans (July 2025)

Lender	Interest Rate (p.a.)	Max Loan-to-Value (LTV)	Max Tenure	Processing Fee	Prepayment Charges
State Bank of India (SBI)	9.10% – 10.15%	Up to 100% of On-Road Price	8 Years	Varies by loan amount	Up to 3% of the closure amount
HDFC Bank	9.20% onwards	Up to 100% on select models	8 Years	Up to 1% (Min ₹3500, Max ₹9000)	3-6% of principal outstanding
ICICI Bank	9.10% onwards	Up to 100% on-road funding	7 Years	0.5% of the loan amount	5% on the outstanding principal
Punjab National Bank (PNB)	8.35% onwards	100% of the ex-showroom price	10 Years	Nil	Nil
Union Bank of India	8.20% onwards	Not Specified	7 Years	₹1,000 + GST	Nil (if from own funds)
Indian Overseas Bank (IOB)	8.15% onwards	Up to 90% of the on-road price	7 Years	Waived until 31/03/2025	Nil

Chapter 2: Financing Your Commercial Three-Wheeler EV

The commercial three-wheeler (3W) segment is the engine room of India’s EV transition, driven by the hard economics of daily operations. Traditional lenders have often struggled with this segment due to uncertainty over the battery’s long-term value. This has created a gap that specialised fintechs have brilliantly filled.

The Fintech Revolution: These companies offer more than just a loan; they provide a complete business solution.
- Turno: This Bengaluru-based startup has become a market leader by addressing the biggest pain point for commercial operators: asset risk. Turno offers a holistic package that includes vehicle sales, low down payments (starting from ₹49,999), and a fast 48-hour loan process. Its most revolutionary feature is a guaranteed buy-back on the vehicle and battery, which removes the uncertainty of resale value.
- Revfin: Revfin focuses on financial inclusion, targeting entrepreneurs and drivers who are often overlooked by the traditional banking system. Its core innovation is an underwriting model that utilises alternative data, such as psychometrics, to assess a borrower’s intent to repay, enabling it to approve loans for individuals with no formal credit history.

Chapter 3: Financing Your Two-Wheeler EV

As the highest-volume segment, the electric two-wheeler (E2W) market has a wide array of financing options catering to urban commuters and delivery professionals. Lenders include major private banks like HDFC Bank and ICICI Bank, as well as fintech players like Revfin and Ecofy, which positions itself as India’s first “green-only” NBFC.

Chapter 4: Government Incentives & The Final Word on Section 80EEB

While federal tax benefits have evolved, various state-level incentives remain a crucial part of the EV affordability equation. It is vital to understand what benefits are currently available and which have expired.

State-Level Subsidies: Many states offer significant financial benefits, including waivers on road tax and one-time registration fees, which directly reduce the on-road price of the vehicle.
The Final Word on Section 80EEB: There is considerable confusion regarding the income tax deduction under Section 80EEB. The deduction, which allowed individuals to claim up to ₹1.5 lakh on interest paid for an EV loan, was a time-bound incentive. It was applicable only for loans sanctioned between April 1, 2019, and March 31, 2023. Therefore, new EV loans taken in 2025 are not eligible for this deduction.

Learn more in our definitive guide: Decoding Government Incentives for Electric Vehicles: The Post-80EEB Era.

Chapter 5: Understanding Key Loan Parameters

To make an informed decision, you must look beyond the headline interest rate.

Loan-to-Value (LTV) Ratio: This is the percentage of the vehicle’s price that the lender will finance. A higher LTV means a lower down payment for you. LTVs for new cars can range from 85% to 100% of the ex-showroom price.
Processing Fees: These are one-time charges for processing your loan application. They can be a percentage of the loan amount or a flat fee. Some lenders, like PNB, often run offers with zero processing fees.
Prepayment Charges: This is a penalty charged if you decide to pay off your loan early. This is a critical factor to consider. Lenders like Punjab National Bank, Bank of Maharashtra, and Bank of India have offered loans with zero prepayment penalties, giving you valuable financial flexibility.

Conclusion

The Indian EV financing market is at a vibrant and competitive inflexion point. The best choice of lender is no longer a simple matter of the lowest interest rate. It is a strategic decision that depends on your specific needs—whether you prioritise the rock-bottom rates of a traditional bank or the speed, accessibility, and innovative risk-mitigation solutions offered by a modern fintech. By using this guide to compare not just rates, but LTV, fees, and unique features, you can navigate this new landscape with confidence and secure a financing solution that is truly optimal for your journey into electric mobility.