The finance subsidiary, Exponent One, will enable operators of autorickshaws to repay loans based mostly on automobile utilization and their day by day earnings as an alternative of mounted equated month-to-month instalments. Exponent One will finance each the retrofitting of CNG or LPG three-wheelers into EVs and purchases of recent electrical three-wheelers.
“Essentially, we predict with EVs, vitality is the capital expenditure drawback. Clients are paying that capex up entrance,” Arun Vinayak, chief govt officer and founding father of Exponent Vitality, advised Mint in an interview. “Clients want modern financing choices if we wish to drive EV adoption.”
EV financing is a distinct segment phase estimated at $3.59 billion this 12 months and projected to develop to $28.7 billion by 2031, in keeping with Mordor Intelligence. India is among the world’s largest EV three-wheeler markets, with gross sales rising 15% to 797,729 items in 2025, its greatest 12 months to date.
Exponent Vitality has roped in former Ola govt Sandeep Divakaran to function CEO and co-founder of the brand new enterprise, alongside Vinayak. Divakaran beforehand served as CEO of evfin, an EV financing firm from Greaves Finance, a subsidiary of Greaves Cotton.
Exponent Vitality raised a $2 million pre-seed cheque from mobility enterprise capital fund AdvantEdge Founders. It’s betting that its battery tech monitoring and real-time evaluation will assist its financing enterprise to underwrite loans extra exactly. The corporate argues that vitality utilization knowledge and underwriting are inherently linked.
Warning alerts
“The mix of battery intelligence from Exponent Vitality and the flexibility to know the earnings of a buyer via monetary knowledge, like an account aggregator, helps us perceive if a buyer is defaulting,” mentioned Divakaran. “Our focus is to construct a product that provides us early warning alerts, and {that a} buyer’s money flows in such a fashion that they do not fail.”
The mannequin has been in pilot testing throughout a number of thousand customers over the previous 12 months forward of a full-scale rollout.
Exponent One has been capitalized individually and structured as an impartial entity to maintain its stability sheet insulated from Exponent Vitality’s deeptech investments, that are anticipated to stay loss-making within the close to time period.
“The corporate might be co-lending and elevating debt from different buyers who will wish to see a wholesome stability sheet,” mentioned Kunal Khattar, founding father of AdvantEdge Founders. “We needed to start out the finance enterprise with a clear stability sheet with no accrued losses.”
Exponent One is banking on Exponent Vitality’s 15-minute charging community, at present operational in Bengaluru, Chennai, Ahmedabad and the Nationwide Capital Area, to assist riders earn extra, scale back defaults, and broaden the financing enterprise. The plan for this 12 months contains going into new markets and consolidating its presence in present markets.
Exponent Vitality has a community of over 100 chargers in Bengaluru and Delhi, and the corporate will enhance the quantity of charging stations within the different two cities. It plans to enter Pune, the place three-wheeler use is heavy, and Hyderabad. There may even be a concentrated effort to place extra EV three-wheelers on the highway.
“We needed to do that after we had the financing capabilities in order that we’re in command of our charge of deployment of autos from our companions, which is why we’re doing this post-Exponent One,” mentioned Vinayak.
Extremely dangerous
Monetary establishments have typically thought of EV financing for business three-wheelers as dangerous, on condition that a lot of the debtors are from low-income teams and their creditworthiness comes into query.
Different challenges embrace the unpredictable resale worth of such autos, battery efficiency and fluctuating earnings for business EV customers. The most important danger is unsure residual values on account of restricted knowledge and speedy expertise shifts, to not point out battery degradation danger because the battery represents a lot of the asset’s worth.
“Restoration is troublesome as a result of EVs will be stripped of batteries and telematics will be disabled,” mentioned Srihari Mulgund, accomplice and new-age mobility chief at EY-Parthenon.
A joint report by the Boston Consulting Group and authorities assume tank NITI Aayog from 2022 discovered that rates of interest for three-wheeler business passenger autos had been 1-7% greater than for diesel/petrol autos and 1-8% greater than for cargo three-wheeler EVs for loans taken from non-banking monetary establishments. Moreover, the tenure for EV loans was shorter – 24-42 months in comparison with 24-60 for petrol/diesel autos.
There hasn’t been numerous enterprise capital curiosity in EV financing both due to the chance concerned in underwriting. Over the previous three years, the highest 10 offers within the phase have stayed beneath $15 million, in keeping with knowledge from Enterprise Intelligence.
In 2025, solely two EV financing startups raised cash: EV leasing and inexperienced financing startup Stride Inexperienced raised $4 million from Incubate Fund Asia, Micelio Fund and others, and EV mortgage firm Vidyut raised $3 million from Trifecta Capital, Alteria Capital and others.
Essentially unattractive
Incumbents together with Tata Capital, Bajaj Finance and Mahindra Finance can readily underwrite EV belongings as a result of they’ve their very own OEM ecosystem.
“In distinction, startups usually work with newer OEMs that lack captive finance capabilities,” mentioned Mulgund. “As a result of EV financing continues to stay a excessive‑danger, low‑margin and capital‑intensive enterprise, the phase is usually seen as basically unattractive for venture-funded startups that depend on asset-light, scalable fashions.”
Then again, some carmakers within the private automobile phase have been barely forward of the curve. They launched assured buyback programmes owing to shopper issues over speedy depreciation in EV costs.
MG Motors affords a 40-60% resale worth for electrical autos aged three to 5 years. India’s largest carmaker Maruti Suzuki may even supply an assured buyback programme as soon as it launches its EV within the home market.
EV financing corporations embrace Mufin Inexperienced Finance, Revfin, and Greaves Finance’s ev.fin.
(With inputs from Ayaan Kartik)