Green Loan

Content
• Existing Product
• Potential Product and Its USP
• Background and Context
• Move towards electric vehicles
• Segmentation, Targeting and Positioning
• Marketing action plan
Existing Product – Vehicle loan by HDFC
Bank

• HDFC Bank offers Vehicle Loans up to 100% of on-road price of

the vehicle, with attractive interest rates and tenure up to 7 years
with interest rate of 8% to 13% per annum.
• Offering 100% finance of on-road price for selected models of
vehicles
• Flexible repayment options like step-up, 3-month and bullet
schemes.
Potential Product

• Theme of the product is green financing. Under this we are

converting vehicle loan to green loan
• Green Loan will be used for financing of activities such as:
• Purchase of Electric Vehicle
• Purchase of E-Rickshaw
• Purchase of DC chargers
• Pricing objective: Lowered interest rates for the purpose of gaining
market share
Other features of product
• After comparing the existing vehicle loans available from various
banks, It is decided to offer the loan at a reduced interest rate
• This is done to entice the potential customers and also to capture
the market share
• The interest rate has been reduced by 20 to 30 basis points
• 100 percent financing on all electric vehicle models
• Faster loan processing for existing account holders and previous
customers
• Discount on documentation charges, processing fees and
foreclosure charges
USP of the product

• Availability of cheaper credit compared to regular vehicle loan

• Additional credit available for purchasing additional equipment
like DC chargers
• Financing for a good cause – Encouraging adoption of electric
vehicles and reducing climate change
Background and Context
• Climate change includes both the global warming driven by human
emissions of greenhouse gases, and the resulting large-scale shifts in
weather patterns.
• Electric vehicles (EVs) emit less greenhouse gases than petrol and
diesel models over a car’s lifetime – that includes the mining of metals
or lithium for batteries, manufacturing, driving 150,000 kilometres
and finally scrapping
• As electricity sources shift from fossil fuels to renewables such as
hydro, solar and wind power, EVs would become relatively more
attractive. India, for instance, is shifting to solar power so EVs would
make sense within a few years
Move towards EVs in India
• The Indian government has announced a goal of reaching 100%
EV penetration by 2030
• Assuming the appropriate infrastructure is in place, 90% car
owners in India are willing to switch to EVs, according to a survey
by the Economic Times in May 2019.
• At present, however, EV market penetration is only 1% of total
vehicle sales in India, and of that, 95% of sales are electric two-
wheelers.
Move towards EVs in India

• Ola, an Indian taxi company, has launched “Mission: Electric” to

integrate 10,000 e-rickshaws and electric auto-rickshaws into its
fleet
• Car manufacturer Mahindra and Mahindra is investing INR18
billion over the next three years into EV production to ramp up its
four-wheeler production.
• Indian Oil, National Thermal Power Corporation and Tata Power
have big plans to proliferate electric charging stations throughout
cities.
 YoY Trend in Sales of Electric Vehicle
180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0
FY16 FY17 FY18 FY19 FY20

e-2-wheelers e-4-wheelers Buses Total

Segment FY16 FY17 FY18 FY19 FY20

e-2-wheelers 20,000 23,000 54,800 1,26,000 1,52,000
e-4-wheelers 2,000 2,000 1,200 3,600 3,400
Buses         600
Total 22,000 25,000 56,000 1,29,600 1,56,000
Analysing the need for the product
According to Maslow's theory of needs,
EVs can be classified as self-
actualisation needs. For these
customers the EV is more than just
transportation. Hence the existing
product, the vehicle loan is classified
to satisfy the esteem needs and the
potential product will have to be
positioned to satisfy customers self
actualisation needs.
Segmentation, Targeting and Positioning
• The consumer base will have to be segmented as
• affluent individuals for luxury electric vehicles
• salaried employees for affordable electric vehicles like two wheelers
• drivers for purchase of electric rickshaws
• We will target all the segments
• Our Bank will be one of the first banks to offer this kind of loan. This
product will have to be well positioned to capture market share
• There is a need to highlight the advantages green loan in order to
promote the adoption of electric vehicles and the cheaper cost of
availing the credit facility
Marketing action plan
• Use targeted channels of communications like digital and social
media advertising highlighting the lower interest rate offered on
loans pertaining to Electric vehicles
• Negotiate tie-ups with auto dealers. They will advice the
customers looking to buy EVs to avail financing using our product
• In turn the bank will also direct potential customers of EVs to the
dealers
• The bank will also try to cross sell the additional credit for
purchase of equipment like DC chargers.
Thank You