cKers Finance, an NBFC focused on financing sustainability and clean energy projects has announced a debt financing tie-up with OTO Capital, an alternate finance startup for two wheelers, for its electric two-wheeler leasing program.
As part of the partnership, cKers has set-up an initial line of Rs 3 crore for OTO. This facility will be used by OTO to purchase e-2Ws in India, which will then be deployed to customers on flexible leasing models. This partnership aims to provide consumers with affordable and flexible financing options to own electric two-wheelers.
The partners say with India being in its nascent stage of EV adoption, financing options are limited and not available at all dealerships and that hinders mass adoption, however lately some of the forward looking businesses are coming out with interesting and easier methods of EV adoption, vehicle leasing being one such adoption model.
Through this initiative, both brands will offer customers a hassle-free experience of purchasing electric vehicles. According to the firms, this initiative will allow customers to save up to 30 percent in their monthly instalment by choosing the OTO Monthly Instalment plans (OMI). The minimum tenure for the leasing program stands at 12 months, which can be increased up to 36 months. Customers have the option to purchase the electric two wheelers by paying the balance cost at the end of the program or upgrade to a newer model.
Deepak Gupta, business development head, cKers Finance said, “Electric two wheelers have still not penetrated the Indian two-wheeler market and constitute less than 1% market share of two wheelers sold each year. The primary reason for that is EVs are still 1.5-2x costlier than other vehicles, though these costs are steadily declining. Additionally, debt providers face a challenge while financing EVs due to the lack of an established resale market in India. The OTO Capital partnership helps mitigate both these factors for vehicle owners relating to lack of financing and resale of EVs. This gives us the comfort to provide a finance line exclusively for purchase and deployment of electric two wheelers and push towards adoption of a cleaner mode of transport.”
Sumit Chhazed, co-founder, OTO Capital said, “We are excited to partner with cKers’ to support the adoption of electric two-wheelers in India. Since the cost of EVs is steadily reducing in India we aim to provide our customers the best pricing with flexibility to ease their buying experience. With that in mind, we have an innovative financing plan where customers spend less on monthly EMIs while having the flexibility in choosing the tenure of the lease plan. The founding team at OTO has prior experience in the two-wheeler resale market, which helps us provide the best value to our customers should they choose to purchase the vehicle at the end of the lease tenure.”
OTO Capital says it has seen a 120 percent increase in the demand for vehicle leasing in the last few months. There is a visible shift in vehicle-purchasing behaviour as consumers are seeking more ‘conservative’ alternatives such as vehicle financing and leasing as alternatives to auto loans.
Jayant Prasad, executive director, cKers Finance added that, “Within the e-mobility sector, we partner with companies that showcase a strong business model, proven unit level economics and track in raising institutional equity. Such borrowers can use our debt for building their fleets of EVs, batteries or charging infrastructure. Our understanding and research about the developments in the EV ecosystem enable us to confidently foray into the new upcoming segments with limited track record.”