The Future of Bike Financing: Electric Two-Wheelers

The Future of Bike Financing: Electric Two-Wheelers

Loans by Team Drivio | 30 Sep 2023

With the popularity and large-scale adoption of electric two-wheelers, lenders are coming up with more favorable terms for financing. This makes the future of bike financing promising for motorcycle enthusiasts in India.


The shift towards green energy and the popularity of electric two-wheelers have ushered a significant transformation in the Indian automobile industry in recent years. As the focus on sustainability intensifies, there’s a pressing need to reduce carbon footprint. Interestingly, electric two-wheelers have emerged as a promising alternative to traditional bikes.

As this shift continues to gain momentum, it’s crucial to explore what the future of bike financing is going to be. Traditionally, banks and NBFCs have helped owners acquire new motorcycles through loans. However, how will the lending landscape evolve with EVs and bikes gaining attention?

In this guide, we are going to discuss the top trends in electric motorcycle financing. We will also provide valuable insights into the future of two-wheeler loans.

Why Are Electric Two-Wheelers Becoming Popular?

Electric two-wheelers have been on the radar of bike enthusiasts due to several reasons. These include:

1.      Sustainable commuting

E-bikes or e-scooters have gained immense popularity in India due to their eco-friendly nature. Growing environmental concerns and the need to reduce air pollution have fuelled the demand for EVs. Naturally, electric two-wheelers happen to be the most viable alternative since they produce zero emissions. They also serve as a sustainable mode of transportation.

2.      Government incentives

The Indian government has introduced various incentives and subsidies in recent years to promote the adoption of electric vehicles. These include tax benefits, lower registration charges, reduced GST rates, and reducing the cost of electric two-wheelers. No wonder, why the demand for e-bikes and e-scooters is on the rise.

The Changing Trends In Electric Motorcycle Financing

Traditionally, banks and NBFCs used to finance new motorcycles running on conventional fuel. However, with electric two-wheelers gaining traction, potential buyers have a range of financing options to choose from. Banks, too, have realized that the future of bike financing looks in good shape, with the government backing these purchases with several subsidies and benefits. 

Let’s take a look into the future of two-wheeler loans in India.

1.  Competitive interest rates

One of the changing trends in electric motorcycle financing involves the affordability of bike loans. Banks and NBFCs are offering these financing options at competitive interest rates. Lenders have introduced attractive interest rates to encourage consumers to choose electric two-wheelers over traditional ones. These rates are often lower than those for traditional bikes.

2. Extended loan tenure

The upfront cost for purchasing an electric two-wheeler can be higher considering the price of the electric motor and the battery. Reputed lenders are offering extended loan tenures to make these vehicles more affordable. As a borrower, you need not stress your finances while paying the EMI since you can spread out the repayment tenure over a longer duration.

3. Higher loan-to-value (LTV) ratios

Some lenders have increased the Loan-to-Value (LTV) ratios to further facilitate the purchase of electric two-wheelers. Therefore, you can finance a higher percentage of the vehicle's cost through a loan. This reduces the need to have a sizable down payment to pay upfront.

The Future of Two-Wheeler Loans

The future of bike financing looks promising for buyers. While it’s becoming increasingly easy to finance these EVs through bank loans, you can expect more lenient lending terms in the future. Here are some of the upcoming trends in electric motorcycle financing.

1. Personalized loan products

The future of bike financing is expected to undergo a greater level of personalization. Reputed banks and NBFCs are likely to offer customized loan products that would cater to the specific needs and preferences of bike owners. As a borrower, you can expect flexible repayment schedules, low-interest rates, and insurance coverage.

2. Digitization and online applications

The application and approval process for two-wheeler loans is becoming more streamlined, thanks to technical innovations. The future of two-wheeler loans will largely be influenced by digitization. Banks and NBFCs are likely to roll out extensive online infrastructures for loan applications. This will allow borrowers to submit their documents digitally and receive approvals quickly.

3. Green financing initiatives

Given that electric two-wheelers align with India’s sustainability goals, leading financial institutions are exploring the scope of providing “green financing”. With these programs shaping up, you can expect even more favorable terms and conditions while financing electric bikes.

Wrapping up

The future of bike financing is evolving rapidly, especially with the growing popularity of electric two-wheelers. In the automotive industry, sustainability has emerged as a driving force in recent years. Therefore, you can expect the financing options to become more attractive. With personalized loan products and favorable repayment terms on the horizon, the future of two-wheeler loans looks promising.

Rather than being the exception, electric two-wheelers are set to become the norm. Accordingly, financing options will continue to adapt, making it easier for you to embrace these eco-friendly solutions for commuting. Whether you are looking for a cost-effective mode of travel or happen to be an environment enthusiast, recent trends in electric motorcycle financing would excite you!