Is Leasing of Green Fleets In The Last Mile Sector A Viable Solution?
The demand for electric 3-wheelers in last-mile deliveries is increasing, but financing remains a major challenge for fleet owners and consumers. To encourage the transition to commercial electric vehicles (EVs), the industry is focusing on leasing as a viable solution. This article examines whether leasing is a feasible option for the last-mile sector.
Limited finance options for commercial electric vehicles in India pose challenges. Product and credit risks, along with the absence of a second-hand market for EVs, discourage banks and NBFCs. To promote financial inclusion, leasing of electric three wheeler cargo has emerged as a feasible option. Here's why:
- Diversification: Leasing allows fleet operators to allocate capital to other aspects of their business instead of investing heavily in expensive vehicles.
- Tax-rebates: Ownership of the vehicle is not mandatory to benefit from tax rebates. Government aid can be obtained by simply filing EV lease details. Additionally, some states offer specific tax rebates, further reducing the leasing cost. In areas without tax credits for leasing, owners can pass on the benefit to customers by lowering monthly payments.
- Cost Factor: The electric three wheeler price is higher than a conventional fuel vehicle. Leasing helps reduce the initial cost, as the vehicle can be obtained with a one-time payment followed by regular installments.
- Depreciation: With leasing, the responsibility for the vehicle's depreciating value lies with the lessor, relieving the lessee of this concern.
- Maintenance-cost: Electric three-wheeler cargo vehicles already have low maintenance costs. Some leasing companies provide service and maintenance packages, eliminating the need for additional expenses in this regard.
- Staying updated: Leasing enables customers to switch to the latest models as battery technology improves, avoiding the burden of an expensive purchase.
- Resale profit: Leasing an EV can be profitable for the lessor. When the lease contract for the electric 3 wheeler ends, the lessor can sell the vehicle, taking advantage of government incentives and earning a neat profit.
Altigreen, an electric vehicle company in India, offers leasing options for neEV, one of the leading electric three-wheeler cargo vehicles in the country. Altigreen's vehicles can be leased for a predetermined time period with timely rental payments, providing customers with the benefits of leasing, installment payments, tax advantages, and opportunities to upgrade to the latest technology.
Switching to EVs is crucial in combating climate change. The high cost, uncertain resale value, and rapidly evolving technology pose challenges for potential EV buyers. Alongside government incentives and tax rebates, better financing options and attractive leasing packages can be game-changers for electric cargo vehicle companies in India.
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References:
https://timesofindia.indiatimes.com/blogs/voices/ev-financing-accelerating-ev-adoption-in-india/
