Fraudulent Practices Impacting EV Financiers

In Bengaluru, fraudsters are exploiting the financing system for electric vehicles (EVs) by purchasing vehicles on finance, selling the new batteries—often more than 50% of the vehicle's cost—and replacing them with used ones. They then default on payments and surrender the vehicle, leaving financiers with a significantly devalued asset. This practice is posing serious challenges to the financing industry.

Proposed Solution: Battery Number in EV RCs

The Finance Industry Development Council (FIDC), a representative body for non-bank lenders in India, has proposed to Union Transport Minister Nitin Gadkari that the battery number be included in the registration certificate (RC) of electric vehicles. This recommendation is part of a letter sent to the ministry, aiming to address the challenges faced by EV financiers. By including the battery number in the registration particulars and database of EVs, similar to the chassis and engine numbers, the FIDC believes it can prevent unauthorized sales and protect financiers' interests.

The FIDC also suggested that if space on the smart card is a constraint, the battery number should be made mandatory instead of the engine number, which is irrelevant for electric vehicles. FIDC Director General Mahesh Thakkar mentioned that while there is no update on the proposal, the group plans to meet with the transport ministry in January to discuss these recommendations further.