Despite lingering concerns over the high price of electric vehicles (EVs), the leasing segment is emerging as a key driver in accelerating EV sales, according to industry executives and experts.
The growing popularity of EV leasing is contributing to the momentum in the market, with several companies witnessing significant growth in this segment over the past 8-12 months. While the upfront cost of EVs remains a dampener for many consumers, leasing offers a more economical alternative. The EV leasing business has seen substantial growth, with more than a dozen companies, including Mahindra Finance-promoted Quiklyz, Ayvens, Yamaha Motor subsidiary Moto Business Service, Alt Mobility, and Lithium Urban Technologies, actively involved in this space. Fleet operators, logistics companies, and employee transportation services are increasingly opting for the leasing route to deploy EVs due to the cost advantages it offers. Leasing eliminates the need for a significant upfront investment, making it more financially viable for businesses.
Comparing the cost of purchasing versus leasing an EV, industry estimates reveal significant savings with the latter. For example, leasing a Tata Nexon EV for a tenure of 48 months can result in savings of approximately ₹1.26 lakh compared to outright purchase, considering factors such as maintenance, repairs, insurance, and no down payment requirement. Ayvens, the largest automotive leasing company in India, with a fleet of 45,000 vehicles, is actively expanding its EV fleet. It anticipates adding 1,500 EVs to its fleet this year, constituting 8% of its annual fleet addition. As the Indian EV market evolves, the leasing industry is addressing key concerns such as residual value, battery health standards, and the expansion of charging infrastructure. These efforts are aimed at further facilitating the adoption of EVs and overcoming barriers related to pricing and infrastructure. The rise of EV leasing signifies a shift in consumer preferences towards affordability and sustainability, driving the transition towards electric mobility in India’s automotive landscape.
