This proposal would solve a crucial pain point for lenders and foster smoother financing processes in the growing EV ecosystem.
To address challenges encountered by financiers of electric vehicles (EVs), the representative body of asset and loan Financing of the NBFCs, the Finance Industry Development Council (FIDC), has urged Union Transport Minister Nitin Gadkari to incorporate the battery number into the registration certificate (RC) of electric vehicles. These and other proposed remedies were included in a letter sent to the ministry.
Batteries in EVs are one of the most expensive components, often comprising 30-40 per cent per cent of the vehicle’s cost. Therefore, in cases of loan default or repossession, the absence of battery details in the RC complicates tracking and recovering the complete vehicle. The RC serves as a critical document linking the vehicle and its owner, and adding the battery number would provide greater clarity and security for lenders.
The FIDC added that incorporating the battery number into the registration details and database of electric vehicles, especially those with fixed batteries, akin to the chassis and engine numbers, can significantly deter unauthorized sales. In cases where the smart card has space constraints, making the battery number mandatory for electric vehicles is essential, as the engine number holds no relevance in this situation.
If battery numbers are included in the RCs of EVs, it will ensure the financial asset (the EV, including its battery) remains intact during loan tenure. Moreover, it reduces the risk for financiers, encouraging them to provide loans more confidently for EVs.
When asked about the letter, FIDC Director General Mahesh Thakkar emphasized that no updates are currently available. However, he highlighted the group’s intention to engage with the transport ministry in January to thoroughly discuss essential recommendations, underscoring the importance of these discussions for future developments.
