Road Testing Electric Mobility in Rural India

This is a Guest Blog by Nitish Arora and Sahana Lokesh of NRDC India

Owning a two-wheeler in villages is not just for transportation, it is a symbol of independence, providing economic freedom and improved access to markets and small businesses.  This freedom is driving growth in two-wheeler sales: rural India already accounts for 55% of the two-wheeler sales nationwide, with a 13% year-on-year increase. While electric two-wheelers are gaining traction nationally, constituting 56% of the total EV sales in FY2023-24, they are yet to make deeper inroads into the rural market. As India strives to meet transportation needs in rural areas, there is a huge opportunity to leapfrog to electric vehicles to improve livelihoods, increase savings and support the country’s energy and equity goals. With this objective in mind, NRDC in collaboration with partners Self Employed Women’s Association (SEWA) and the Small Industries Development Bank of India (SIDBI), had initiated a pioneering EV pilot in January 2024. Interviews with the beneficiaries show promising results and a big opportunity to scale up.

Lessons from the Electric Two-Wheeler Pilot

Initially focusing on the Anand District of Gujarat and the Dungarpur District of Rajasthan, the pilot deployed ten electric Ather two-wheelers to SEWA members residing in each of the districts. This pilot aimed to solve the common mobility challenges in rural areas, such as: long distances between public transportation access points, lack of auto-rickshaw availability, exorbitant fares, longer commute time and high personal vehicle fuel and maintenance costs. Prior to the pilot, the participants, who travelled approximately 200 km to 350 km per week, would regularly spent nearly 20 – 40% of their total family income on vehicle fuel, maintenance and repairs. Switching to e-scooters reduced the travel cost to a fraction, significantly easing financial burdens.

Seven months later, we have early indications of the pilot’s success: avoiding fossil fuels have saved approximately 1000 kg CO₂ emissions across 26,800 km of total distance travelled using the e-scooters. Beneficiaries of the pilot reported improved access to mobility, reduced expenditures on fossil fuel and renewed confidence in EV performance and safety. They reported that the e-scooters increased their ability to access markets and efficiently carry out their commercial and business activities. The pilot participants have expressed that the e-scooters were more user-friendly and have more storage space which has made transportation of goods easier than traditional fossil fuel vehicles. Despite some challenges, like limited electricity access, nearly 50% of the survey respondents were willing to take out loans to buy EVs because lowered fuel costs offset the additional loan expenses. For some of the beneficiaries, this e-scooter is the first ever asset that they have bought in their own name.  

Developing a Financial Ecosystem for Rural E-mobility

Finances are often a barrier to purchasing EVs. To help lower this barrier to EV adoption in rural areas, NRDC India and SIDBI launched the Empowering Women and Enhancing their Business through E-Mobility (EWEE) initiative, which provides concessional loans for EV financing for beneficiaries. Under the initiative, SIDBI has partnered with SEWA, Original Equipment Manufacturers (OEMs), Non-Banking Financial Companies (NBFCs) like Revfin and AMU Leasing to provide affordable financing options to SEWA members for the purchase of electric two- and three-wheelers. NRDC, in collaboration with SIDBI and its empaneled NBFCs, has also carried out awareness programmes in villages across Gujarat and Rajasthan. 

The success of these efforts have generated greater interest among rural inhabitants for more e-mobility solutions. As NRDC continues to partner with OEMs and conduct product demos with SEWA sisters, we are also working with SIDBI and SEWA to operationalize the country’s first risk sharing facility for financing EVs in rural areas. We also aim to expand this pilot program to include other vehicles such as electric tractors, to demonstrate viability and benefits, and help inform national and state agricultural mechanization schemes and EV policies. As with the two-wheeler pilot, we hope that the success of these rural e-mobility initiatives will provide valuable insights and lessons for the Global South on how to make the clean mobility transition more inclusive and equitable.

Testimonials by SEWA sisters who participated in the rural e-mobility pilot: