Chennai: Murugappa Group NBFC Cholamandalam Investment and Finance Company (Chola) expects electric vehicles (EVs) to emerge as a key disruptor in the two-wheeler market, particularly in the entry-level and commuter segments.In its latest annual report, the company said the shift towards EVs in the commuter segment is being driven by govt incentives, lower operating costs and increasing product availability, although price sensitivity remains a critical factor.“The automobile industry is witnessing an early but steady transition towards alternative powertrains, particularly electric vehicles (EVs), especially in the last-mile delivery segment,” it said.The company said the domestic two-wheeler industry grew 11% in FY26, supported by a recovery in rural demand, improved access to financing and better affordability. Demand from Tier-3 and Tier-4 markets, along with increasing participation by women riders, has also broadened the customer base.However, the lender expects industry growth to moderate to 3%-5% in FY27 as the market transitions from a cyclical rebound to a steadier phase of demand.Meanwhile, Cholamandalam said it exceeded its institutional disbursement targets for EV financing in FY26, reflecting strong demand for green mobility. As part of its green financing strategy, the company is accelerating disbursements for electric vehicles across all segments while expanding project financing for solar energy deployment under its SME lending portfolio.With banks and non-banking financial companies (NBFCs) playing an increasingly important role in financing electric mobility, calls are growing to bring EV financing—particularly for public transport, MSMEs and small commercial operators—under the Priority Sector Lending (PSL) framework or create a dedicated green mobility category to encourage greater participation by lenders.
