One of the main challenges in the adoption of electric vehicles (EVs) is high upfront cost compared to ICE vehicles. Challenge of high cost of asset(s) is further aggravated with lack of affordable financing with both lack of affordable financing both for manufacturing and with purchase of the vehicles. Lack of affordable finance is due to several factors including limited risk appetite of financial institutions (FIs), limited understanding on the viability of the existing business models, nascent stage of the sector, absence of regulatory support, among others. To determine the appropriate financing mechanism for an enterprise, consumer, region, technology, or business model, it is important to understand the spectrum of capital instruments that are available in the market.
The Siemens Foundation and Intellecap (advisory arm of Aavishkar Group) analyse the potential of a blended finance mechanism as the appropriate financing mechanism for e-mobility sector in Africa.