The Future of EV Lending: How OEM–Fintech Alliances Power AI-Driven Credit

Electric vehicle (EV) adoption in India is accelerating yet, the growth curve is constrained not by technology or demand, but by credit access. EVs are capital-intensive assets, and their financing requires an entirely new playbook. Traditional banks and NBFCs, while established in retail asset products, often struggle to underwrite EV risk efficiently. This is where collaborations between original equipment manufacturers (OEMs) and fintechs are rewriting the rules of customer financing through AI-powered embedded finance ecosystems.

This article explores how these partnerships are reshaping India’s EV credit landscape blending strategic alliances and technological frameworks to deliver instant, data-driven, and inclusive lending.

Why OEM–Fintech Partnerships Matter

The evolving role of OEMs in financial access

Historically, most automobile financing is provided by NBFCs and banks operating independently of automakers. However, as EVs enter the mainstream, OEMs are increasingly realizing that financing is not just a back-end support service it is a growth lever.

OEMs like Tata Motors, Mahindra, Ather, and Ola Electric have already embedded customer financing within their sales ecosystems. These companies no longer rely solely on third-party banks; instead, they co-create embedded finance models with fintechs that operate at the point of sale (POS) to provide instant loan offers.

Such integrations ensure that a customer’s purchase journey from vehicle selection to loan disbursal happens within a single digital flow.

The fintech advantage

Fintechs bring speed, automation, and AI in banking and finance expertise. By leveraging data analytics, open APIs, and real-time risk scoring, they reduce credit friction dramatically. Fintech partners also specialize in partial underwriting approving customers with thin or no credit histories using alternative data.

For OEMs, this unlocks sales from untapped markets, while lenders enjoy higher conversion with lower processing cost. The result is a hybrid ecosystem that merges manufacturing, technology, and finance into one digital transformation in finance industry framework.

The Co-Lending Model: Aligning Scale and Agility

How co-lending works

Co-lending combines the balance sheet strength of banks/NBFCs with the agility of fintechs. Under this model, fintechs handle sourcing, credit evaluation, and AI-driven underwriting, while regulated financial institutions fund the loans.

Through such partnerships, OEMs gain direct integration into credit processes without holding lending risk themselves. For instance, Mahindra Finance’s 2022 partnership with CRIF Solutions introduced AI-led digital underwriting for EVs, achieving near-instant loan decisions and reduced turnaround times.

Risk-sharing and compliance

In a co-lending setup, the fintech partner acts as the technology and origination engine, while the bank ensures regulatory compliance. Data is exchanged through secure APIs, ensuring adherence to KYC remediation and kyc for high risk customers norms.

This model balances innovation with accountability fintechs innovate, banks regulate, and OEMs integrate. It demonstrates innovation in banking sector that transforms both credit velocity and portfolio diversity.

Embedded Finance: The OEM-Fintech Engine

Embedding finance into the EV journey

In EV retail, embedded finance is redefining the buying experience. A potential buyer browsing an OEM app or dealership site can receive instant financing offers through fintech integrations. The system fetches bureau data, verifies KYC, evaluates telematics or payment history, and generates a customized consumer finance loan within minutes.

Such POS financing allows for near-zero drop-off between intent and purchase. Tata Motors’ partnership with State Bank of India (SBI) and fintech intermediaries like Paytail demonstrates how customer financing can be integrated into every product launch.

Tech stack of embedded finance

1. API Infrastructure: Connects OEM CRM and dealer management systems to lending platforms.

2. AI/ML Credit Engine: Performs artificial intelligence in banking pdf-style scoring using alternative data (UPI transactions, mobile usage, telematics).

3. KYC & Compliance Layer: Executes digital transformation in finance industry protocols such as video KYC, insurance distribution channels linkage, and digital signatures.

4. Disbursal & Monitoring: Automates payments, EMIs, and performance tracking using real-time dashboards.

This multi-layered architecture enables rapid loan origination and seamless customer financing integration.

Strategic Partnership Archetypes

OEM–fintech collaborations in India and abroad are emerging in distinct forms:

Distribution-led partnerships

OEMs integrate fintech APIs into their dealer systems, offering POS financing directly. Example: Ather Energy’s partnership with L&T Finance for 100 % on-road financing and <5-minute approvals. The fintech provides the tech layer, while L&T funds the loans.

Platform-led ecosystems

Some fintechs evolve into multi-brand lending platforms. Ola Financial Services, for instance, offers financing across its EV range via its app. The platform supports retail asset products, insurance bundling, and cross border payment India infrastructure for NRI buyers.

Captive fintech arms

OEMs like Tesla globally, and Tata in India, are building in-house fintech subsidiaries. These arms act as internal credit orchestrators, partnering with banks for liquidity while controlling the underwriting and customer experience layer.

Data-sharing and analytics collaborations

Through anonymized data exchange, fintechs gain insights into customer behavior, while OEMs receive feedback on credit approvals, risk profiles, and product-market fit. These insights inform both importance of underwriting and product design decisions.

Such partnership typologies represent recent trends in banking sector where boundaries between manufacturer, lender, and fintech blur to create unified ecosystems.

The Technology Core: AI, APIs, and Automation

AI-powered underwriting

Fintechs and OEMs increasingly rely on AI in banking and finance to assess borrowers. Machine learning models evaluate thousands of variables income surrogates, location patterns, utility payments to build precise credit profiles.

This method extends financing to underbanked segments. According to McKinsey (2024), reduces loan turnaround times by up to 70 % and default rates by 20 %.

API-first ecosystems

Application Programming Interfaces (APIs) are the nervous system of embedded finance. They allow OEM platforms, lenders, and fintechs to share data securely in real time. This modularity enables co-lending at scale and ensures interoperability across systems.

#For example, the government-backed Account Aggregator (AA) framework supports secure consent-based data sharing between lenders, fintechs, and OEMs, boosting data science in banking adoption across industries.

Automation and customer experience

Automation tools streamline KYC remediation, document verification, and insurance aggregators integration. Customers can select financing, sign documents digitally, and receive disbursal all within one interface. This mirrors recent trends in banking toward paperless journeys and frictionless credit.

Case Studies: Partnerships Driving EV Credit Scale

Tata Motors x SBI x Paytail

Tata’s alliance with SBI integrates AI-led credit tools through the fintech Paytail, allowing on-the-spot approvals and up to 100 % consumer finance on select EV models. This hybrid OEM–fintech–bank model combines institutional capital with digital agility.

Ola Electric x IDFC First Bank x L&T Finance

Ola Electric leverages its digital ecosystem to provide pre-approved POS financing for customers via app-based journeys. Its partners handle risk assessment through AI in banking systems that use alternate data. Loans offer 60-month tenures at 6.99 % interest.

Mahindra Finance x CRIF Solutions

Mahindra Finance’s integration with CRIF’s StrategyOne decision engine allows AI-based underwriting using both bureau and alternative data. The system automates kyc for high risk customers, disbursals, and risk monitoring, enabling faster EV adoption.

Bajaj Auto x RevFin x IFC

RevFin, backed by IFC, partners with OEMs like Bajaj to provide customer financing for electric 3Ws. Its embedded finance infrastructure and AI in banking and finance models enable rural borrower inclusion a key step toward democratizing EV ownership.

These examples illustrate that collaborative ecosystems outperform isolated efforts.

Regulatory and Policy Enablers

Priority sector classification

Including EV loans under priority sector lending (PSL) norms would enable banks to allocate capital more freely to green assets. NITI Aayog has recommended this to accelerate financing momentum.

Digital lending guidelines

The RBI’s digital lending framework (2022) promotes transparency, direct disbursals, and data security. It mandates importance of underwriting integrity and fair-practice codes crucial for sustainable growth of embedded finance ecosystems.

Green bonds and ESG alignment

Banks like HDFC and SBI have issued green bonds exceeding $300 million each to fund sustainable lending. Such instruments can be deployed into consumer finance loan pools that support EV buyers.

This multi-tier policy support enhances the future of fintech in India and signals that technology-led finance is a national priority.

Challenges and Risk Mitigation

Despite rapid growth, OEM–fintech alliances must navigate several challenges:

• Data privacy: Shared data must comply with India’s Data Protection Act, ensuring consent and secure storage.

• Operational risk: API failures or cybersecurity breaches can disrupt entire POS financing networks.

• Over-leveraging: Aggressive customer financing could mirror the early BNPL overextension risk.

• Regulatory clarity: As partnerships evolve, clear guidance on co-lending accountability is essential.

Effective underwriting, audit mechanisms, and real-time dashboards can mitigate these risks, ensuring sustainable scaling.

The Road Ahead: A Unified EV Financing Ecosystem

India’s EV financing landscape is on the cusp of transformation. By 2030, more than 70 % of EV sales are expected to be credit-linked, and nearly half of these could be powered by AI-driven embedded finance systems.

The convergence of OEMs, fintechs, and traditional lenders represents the future of fintech in India. Each player brings unique capabilities: OEMs provide customer access, fintechs deliver speed and intelligence, and banks supply capital depth.

Together, they form a symbiotic triangle where AI in banking and finance becomes the engine of credit inclusivity, and embedded finance becomes the chassis connecting every stakeholder.

By aligning strategic collaboration with technological integration, India can unlock not just EV sales, but a new generation of smart, sustainable, and inclusive consumer finance ecosystems where every vehicle sold carries not just a battery, but a built-in credit revolution.

FAQs

Q1. Why are OEM–fintech partnerships important for EV lending?
Ans. They embed financing into the EV purchase journey, offering instant loans, boosting adoption, reducing drop-offs, and expanding access for underbanked buyers.

Q2. How does co-lending work in EV financing?
Ans. Fintechs manage origination and AI underwriting, banks provide capital, balancing speed, innovation, and compliance for scalable EV lending.”

Q3. What technologies power embedded EV finance?
Ans. APIs link OEMs, lenders, and fintechs, while AI evaluates credit; automation streamlines KYC, disbursals, and insurance for a seamless EV financing experience.

Q4. What are the risks and mitigation strategies?
Ans. Risks include data breaches, operational failures, and over-leveraging; strong governance, real-time monitoring, and compliance mitigate exposure.