Terra Motors launches Terra Finance in partnership with Vedika Credit Capital to empower EV drivers and make them ‘atma nirbhar’
Mr. Gautam, Vedika Credit and Terra Mortars CEO Ueda at the signing ceremony
August 9, 2021 3:00 PM: Leading EV manufacturer Terra Motors has forayed into EV financing with the launch of Terra Finance India. This move is part of the ongoing initiative by the electric automotive giant to create a sustainable ecosystem for EV through co-creation. Terra Finance will provide easy access to 3W EV loans and financing for drivers, while mitigating risk and creating jobs for them. The finance division is launched under Terra Finance India Pvt Ltd, which is a joint venture company, established to promote the microfinance business that will support the purchase of EVs in India’s rapidly growing commercial EV market. Terra Finance India Pvt Ltd is a joint venture between Terra Motors and its local partner, Jharkhand based Vedika Credit Capital Ltd (Vedika).
Talking about the partnership, Gautam Jain, President, Vedika said “While there are many challenges in penetrating microfinance in the new EV industry, we aim to build a safe and convenient business that will contribute to revitalizing the local economy and solving local issues. We have been working with Terra Motors since 2018 to create jobs and improve incomes in low-income communities by providing loans for their EV 3-wheelers. We feel that the impact of Corona will further increase the value of these projects. Through this partnership, we hope to maximize the social value of our business by combining Terra Motors’ commitment to the EV business and India, our brand strength, and our financial know-how and experience to create a better society.”
Terra Motors has been manufacturing and selling 3-wheeled EVs for the purpose of expanding transportation infrastructure and creating employment in the last mile and rural areas in India. 70-80% of the 3-wheeled EV market is in the economically weaker states (Bihar, West Bengal, Assam, and Uttar Pradesh). These 4 states form the major market for 3W EVs in India. The potential customer base for all three types of EVs is 51.4% of the total Indian population. Among them, the segment with an annual household income of approximately $3,000 (2 Lakhs) base will purchase e-rickshaws as a means to improve their income. However, since the cost of purchasing a vehicle is more than 50% of their annual income, they are unable to take advantage of purchase opportunities without loan support, and as a result, they are in an environment where it is difficult to break out of the cycle of poverty.
Terra Motors was already providing loan access to their drivers through partnerships with various NBFCs like Prestloans, Pooja Finelease. Owing to the trial responses to loans in 2018, where complete repayment happened, Terra Motors decided to foray into the EV financing. Adding to this President and CEO of Terra Motors India, Akihiro Ueda said “By expanding the opportunity to purchase Terra Motors’ e-mobility more easily, we aim to provide “earning power” which will improve the lives of people who have not been able to benefit from existing financial services, and develop a sustainable transportation infrastructure. The market for e-rickshaws is currently 80,000 to 90,000 units per year, but we believe that there are a certain number of potential customers who would like to purchase an e-rickshaw, but are unable to do so due to the lack of financial services to support their purchase due to their low income bracket. Our goal is to build a microfinance business that can reach these customers, raise the level of the market as a whole, and create a service that will help them live a better life in order to solve the social problems worsened by Corona.”
About Terra
Terra Motors’ vision is “to create new industries and make society more convenient”. Terra Motors is a Japanese global venture company that aims to be a leading company in sustainable e-mobility, developing, manufacturing, selling, and providing after-sales service for EVs (electric two-wheelers and three-wheelers). The electric tricycle called “E-Rickshaw” has the largest market share in India. In addition to the Tokyo headquarters, the company has operations in three other Asian countries.
Terra Group believes that through their endeavours they are contributing to the creation of job opportunities for low-income people around the world, the improvement of their lives, and the realization of a prosperous society.