Drawbacks in Financing Electric Two-and-Three-Wheelers

It’s not always easy to introduce a financing model, as it can have certain advantages and disadvantages. Still, for end users, the disadvantages may be more critical when deciding whether to buy an electric two-and-three-wheeler.

This article will:

• Highlight the main drawbacks in financing and procurement models.
• Explain how an institution, government, or organization can overcome these drawbacks.

Drawbacks of financing electric two-and-three-wheelers

Higher price

Electric two-and-three-wheelers tend to have a higher selling price than internal combustion vehicles, making them difficult to finance for many consumers.

Higher price representation. Unsplash (2020)

Lack of charging infrastructure

The need for adequate charging infrastructure for electric two-and-three-wheelers may prevent some consumers from purchasing them.

Charging station. Unsplash (2021)

Lack of knowledge

Consumers’ lack of familiarity with electric two-and-three-wheelers could make lenders reluctant to finance them.

“Love to learn” sign. Unsplash (2019)

How can countries overcome financing barriers?

To overcome the barriers to financing electric two-and-three-wheelers, some nations have taken steps to incentivize their adoption and make them more affordable. Some of these measures include:

Partnerships with vehicle manufacturers

Governments can also work closely with manufacturers of electric two-and-three-wheelers to develop specific financing solutions that meet the needs of consumers. This may make lenders more likely to finance these vehicles, as they may have more confidence in the warranty and maintenance of the vehicles.

Awareness campaigns

Governments and other organizations can conduct awareness campaigns to educate consumers about the environmental and economic benefits of electric two-and-three-wheelers. This can increase demand and make lenders more likely to finance these vehicles.

Government incentives

Many governments offer financial incentives, such as tax reductions or subsidies, to encourage the adoption of electric two-and-three-wheelers. These incentives can reduce the selling price of the vehicle and make it more attractive to consumers.

Charging infrastructure

Governments can also invest in building adequate charging infrastructure for electric two-and-three-wheelers. This can increase consumer confidence in adopting these vehicles and make them more attractive to lenders.

Conclusion

In summary, overcoming the barriers to financing electric two-and-three-wheelers requires appropriate government policies, adequate charging infrastructure, and consumer awareness.

Collaborating with vehicle manufacturers can help develop financing solutions that meet consumer needs.