| The government of India and the World Bank are partnering on a risk-sharing mechanism to compensate banks giving loans for electric vehicle (EV) purchases. The fund will provide $1 billion to help cut the cost of EVs and speed up the transition to cleaner transportation in India, where air pollution is at an all-time high and poses a significant health risk.
"Clean transport is laudable, but this dangerously incentivizes subprime auto lending. The market's saying something: EVs might be good for the environment, but carelessly subsidized, they're a financial sinkhole for Indian consumers," said Tyler Brown, analyst at Insider Intelligence.
As EVs remain 10% to 40% more expensive than traditional gas- or diesel-powered vehicles, funds such as this are becoming more common to aid in the transition. In the US, Vermont has become the first state to offer point-of-sale rebates to those purchasing e-bikes. And though these are all great steps, a study from the National Bureau of Economic Research found that most of the benefits of EV subsidies go to high-income households. Until that is remedied, many people will not see the monetary benefit of going electric. | |
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