From Credit Gaps to Clean Mobility – How Perpetuity Capital is Changing EV Financing

1. What structural inefficiencies or gaps in traditional vehicle financing did you identify before launching Perpetuity Capital?
   Before launching Perpetuity Capital, we observed several systemic gaps in the way traditional lenders approached commercial vehicle financing. Our initial focus was on financing both new and used revenue-generating assets across categories—taxis in the ride-hailing ecosystem (Ola/Uber), LCVs and HCVs used for cargo movement, and vans used for last-mile delivery and passenger transport such as school carpools and tourist vehicles. The first major gap we identified was the significant credit under-servicing of Driver-cum-Owners (DCOs) and small fleet operators. These borrowers form the backbone of the logistics and mobility ecosystem, yet they are often overlooked due to limited financial documentation and thin credit histories. In the used commercial vehicle segment, the challenges were even more pronounced. There is a clear timing mismatch: a used vehicle is typically sold well before banks are ready to disburse funds. Traditional lenders insist on adding their hypothecation to the vehicle before releasing the loan amount, but in practice, sellers expect payment upfront before initiating ownership transfer at the RTO. This creates friction and slows down transactions. Additionally, traditional banks and NBFCs often take 5–7 days to complete due diligence, relying heavily on manual processes and physical verification. Their limited digital infrastructure leaves many borrowers waiting unnecessarily, especially when they need quick access to income-generating assets. In the EV segment, we observed similar inefficiencies. Many prospective EV buyers—particularly single-owner drivers and migrant workers—lack formal financial footprints despite demonstrating strong repayment behavior through alternative indicators. Traditional lenders struggle to underwrite such customers due to rigid documentation requirements. Perpetuity Capital was built to address these gaps. By leveraging technology, alternative data sources, and a digital-first underwriting process, we aim to bridge the credit gap and offer faster, more inclusive financing to the segment that needs it the most.
   
   
2. Are you seeing stronger traction in Tier 1 cities or are Tier 2/3 cities catching up in digital EV loan adoption?
   
   We are actually seeing stronger traction in Tier 2 and Tier 3 cities. Many of these towns have been early adopters of electric vehicles—particularly electric rickshaws, or “electric totos” in local terms—for almost a decade. EVs emerged as a practical solution to the gaps in public transportation infrastructure in these regions, where metros, suburban trains, and reliable bus networks are often limited or absent. Electric rickshaws became widely adopted because they served as an affordable and efficient alternative to conventional buses and taxis, especially as fuel prices continued to rise. This long-standing familiarity with EVs has made customers in Tier 2 and Tier 3 markets more comfortable, and therefore more willing, to adopt EVs.        

3. How supportive is the current policy environment in India for EV financing and FinTech innovation?

India’s current policy environment is broadly supportive of EV adoption. Central government initiatives such as FAME-I and FAME-II have offered direct incentives to buyers and helped reduce upfront costs. GST on EVs and charging equipment has been reduced to 5%, improving affordability and encouraging adoption. However, while FAME-II allocated around ₹10,000 crore, this scale of funding is relatively modest for a country as large as India.

When compared to China, the difference is more pronounced. China has followed a far more aggressive, centrally coordinated approach—combining subsidies with large-scale infrastructure investment, local government mandates, and strategic industrial support. This holistic push enabled China to build dominant EV brands, localize supply chains, and become the world’s largest EV market. Overall, India’s policies are directionally strong, but the ecosystem still has significant room to grow, especially in terms of scale, manufacturing depth, and charging infrastructure—areas where FinTech and EV financiers can play a role of an enabler.

4. What metrics or milestones define success for you in this industry—from market share to EV penetration enabled through financing?

For us, success is defined primarily by two metrics: AUM growth and NPA levels. Finance is easy to disburse, but sustainable lending is measured by strong collections and disciplined asset quality. Since we focus exclusively on EV and cleantech financing—2-wheelers, 3-wheelers, batteries, and related infrastructure—the demand side is growing steadily. The real challenge is building a scalable, retail-focused lending business across rural and semi-urban India, where language and cultural differences vary widely. Despite these differences, our borrowers share a common aspiration for upward mobility. Our goal is to support the driver-cum-owner segment and enable their transition to cleaner, income-generating assets.

5. Are there specific regulatory challenges that still hinder faster adoption of EV loans or digital lending practices?

We don’t view regulation as a barrier—in fact, we welcome it. Strong regulatory frameworks help keep out short-term, non-compliant players and create a healthier ecosystem. As an RBI-registered NBFC, we fully comply with all prescribed lending norms and have clear processes for customer grievance redressal across our website and app. That said, one area where policy support could accelerate adoption is access to lower-cost capital for lenders focused on bridging credit gaps in emerging sectors like EVs. More affordable capital would allow us to extend the benefit to end borrowers and support faster, more inclusive EV adoption.

6. Compared to traditional NBFCs or banks, how does your digital-first model reduce the cost of credit and improve loan accessibility?

By taking a digital-first approach, we’ve built core lending processes that ensure responsible, transparent, and efficient operations – from customer onboarding and KYC to credit assessment, disbursement, and collections. We also use AI tools to support our credit officers with data and bank-statement analysis, which helps reduce underwriting turnaround time and improve accuracy.

While developing our own technology requires upfront investment, it allows us to standardize processes, enhance efficiency, and scale sustainably – benefits that grow significantly as our portfolio expands.

7. Where do you see Perpetuity Capital—and the broader EV financing industry—five years from now?

The EV ecosystem in India is still at a very early stage. EV sales in the country are only around USD 3 billion today, while pollution and carbon emissions remain major concerns—commercial vehicles alone account for nearly 15% of India’s emissions. For perspective, China sold approximately 11 million EVs in 2025 and continues to grow at around 30% annually. India has a long way to go before reaching that scale.

Over the next five years, we expect a surge in companies working to address climate and mobility challenges, and we see Perpetuity Capital playing a central role as an enabler in this transition. Our goal is to finance the shift from ICE to electric at the grassroots level, supporting driver-owners, small fleet operators, and local entrepreneurs who form the backbone of India’s mobility sector.

In doing so, financial inclusion becomes a natural outcome of our mission. By empowering underserved borrowers with access to clean, income-generating assets, we hope to contribute meaningfully to both environmental progress and economic opportunity.