FROM DIESEL TO ELECTRIC: HOW AUTO-RICKSHAW DRIVERS ARE FINANCING THE SHIFT

• Publish on Jun 04, 2025
• Read Time 5 min

The Electric Transition: What’s Underpinning It?

A quiet revolution is taking place on the roads of India. As cities become more populated and air pollution becomes a growing cause for concern, the focus is shifting toward cleaner, more sustainable forms of mobility. For many, the transition from diesel to electric vehicles isn’t just a luxury — it’s a requirement. The driving force behind this shift are the auto-rickshaw drivers, who are at the forefront of this change. But how are they actually making this jump? The answer: they specifically need financing for electric auto-rickshaw solutions that meet their unique financial circumstances.

The Financial Conundrum: Financing is Key

Transitioning to an electric vehicle is a smart long-term economic move — but the initial expense remains a heavy burden for most drivers. The cost of a traditional diesel auto-rickshaw ranges from ₹1.5–1.8 lakh; for the electric one, the price varies from ₹2–2.5 lakh. That’s a big jump. For drivers whose daily earnings are low, this expense can seem a bit out of reach.

That’s where loan schemes for electric auto-rickshaws enter the picture. Banks, NBFCs and fintech companies are offering personalized financial solutions that are making the shift to EVs easier for rickshaw drivers. These loans frequently have low EMIs, little documentation, and sometimes even online onboarding.

Government Subsidies: Why EVs Are Affordable

The urgency of electrifying transport has been recognized by India’s government, and it is being supported strongly. Under the FAME II scheme, EV owners are given upfront discounts on EVs, which can be as much as ₹50,000. This EV wonder features government subsidy on electric rickshaw that helps in bringing down the cost barrier considerably.

The Ministry of Heavy Industries is also working with states to push regional-level incentives, such as waiver of vehicle registration fees, providing free permits, and waiving road taxes. This makes auto-rickshaw electric conversion even more appealing to common drivers.

The Role of Microfinance and NBFCs

When formal banks hesitate, microfinance institutions and NBFCs (Non-Banking Financial Companies) step in. These organizations understand the financial behavior of drivers and offer flexible repayment structures. For example, some schemes deduct EMIs daily from digital wallets based on income earned—reducing the pressure of monthly fixed payments.

This flexible model has made microfinance for EVs a game-changer in semi-urban and rural areas. Companies like RevFin, Three Wheels United, and Mufin Green Finance are offering tailored products, focusing solely on electric three-wheeler financing options.

Financing Models Designed for Drivers

Drivers have unique needs, and the market is responding with creative options:

• Pay-As-You-Drive
  Instead of fixed EMIs, drivers pay based on the kilometers driven. This model makes financing electric auto-rickshaw much more manageable.
• Lease-to-Own
  Drivers lease the vehicle and eventually own it after 2–3 years. It removes the need for large upfront payments and is especially helpful for new drivers.
• Battery-as-a-Service (BaaS)
  By renting the battery separately, drivers reduce the initial vehicle cost. Batteries can be swapped daily at charging stations, improving uptime.
  These evolving models make sustainable transport for drivers both accessible and practical.

Cost Comparison: Diesel vs Electric

Let’s crunch the numbers to show how electric is actually cheaper in the long run:

Despite the higher purchase price, electric models offer substantial savings. These figures show why electric vehicle adoption rickshaw solutions are increasingly in demand.

Real Impact: Stories from the Ground

Ramesh, a driver in Lucknow, made the switch with a low interest EV loan scheme from a local NBFC. He put down just ₹25,000 and pays ₹100 daily from his digital earnings app. His monthly income increased because of lower fuel and maintenance costs. He even has more time with family, thanks to fewer breakdowns.

Thousands like Ramesh are proving that with the right financial support, the diesel to electric rickshaw shift is not only possible—it’s profitable.

Driving Toward a Cleaner Future

As India pushes for a greener future, green mobility India isn’t just about technology—it’s about inclusivity. Empowering rickshaw drivers through accessible loans, government subsidies, and innovative business models will play a key role in urban sustainability.

Today, with increasing awareness, better infrastructure, and smarter finance, the road from diesel to electric is becoming easier to navigate. The growth of financing electric auto-rickshaw systems signals not just a change in fuel, but a shift in livelihoods and hope.