JSW MG Motor India has partnered with Kotak Mahindra Prime for its Battery-As-A-Service (BaaS) ownership program to EV customers, making KMPL one of the first auto financers to support the BaaS concept.
KMPL has had business relationship for channel finance and retail finance with JSW MG Motor India since the carmaker’s inception in India in 2019.
JSW MG Motor’s innovative Battery-as-a-Service threatens to create major disruption in the Indian electric car market by reducing the upfront price of an EV car by around 40%.
For budget-conscious Indian consumers, BaaS can make electric vehicles more affordable by significantly lowering the upfront cost, as buyers don’t need to purchase the expensive battery outright. This is how, by separating the battery cost from the vehicle, MG Motor was able to price its latest launch the Windsor EV at Rs 9.99 lakh and undercut primary rival Tata Punch EV. The MG Windsor also comes with a lifetime warranty on the battery for customers and a 60% assured buyback value after three years for those who buy a three-year maintenance plan with the car.
BaaS is a relatively new concept in India, and Indian consumers are traditionally more inclined to own their assets outright, including the battery. Convincing buyers to adopt a subscription-based service for something as critical as their vehicle's battery may face resistance.
Globally, some users have criticized the ongoing subscription fees associated with BaaS, arguing that over time, these fees could outweigh the benefits of reduced upfront costs. The monthly payments can be seen as an additional burden, especially in regions where vehicle ownership costs are already high.
The challenge for India, however, remains that since India is still at a very nascent stage of EV adoption, getting used to BaaS will take time. While challenges around battery swapping infrastructure, resale value and consumer education need to be addressed for the model to thrive, BaaS has the potential to become a game-changer for JSW MG Motor in the Indian market.
"KMPL’s vast network and connect with dealer partners will surely be an added advantage for an enhanced penetration of the unique BaaS concept, thereby boosting our EV sales," Gaurav Gupta, Chief Growth Officer, JSW MG Motor India said.
Vyomesh Kapasi, Managing Director and CEO, Kotak Mahindra Prime said that this collaboration aimed to enhance the EV financing ecosystem in India by offering innovative and customer friendly finance products across various segments. "We are confident that this partnership will further strengthen our finance offerings and support the adoption of electric vehicles."