To achieve India’s target for energy independence by 2047, the country needs to take proactive steps to accelerate the growth of the EV sector. A crucial step is bringing down the real and perceived risks for purchasers and financiers. One of the most powerful levers for doing this is establishing clarity on the residual value of EVs — the price an EV and its battery can command in the secondary market at a given time. This will help consumers get a more accurate sense of their total and bring down purchase uncertainty, boosting the demand for EVs and growing the market for second-hand EVs. It can also help increase EV financing by helping financiers more accurately estimate their ability to recoup their loans in case of default. Together, the increase in demand and financing can encourage on and scale the supply of EVs.

The residual value of an EV is influenced by the interplay of three sets of factors: 1) asset quality, 2) ability to extract value and 3) consumer willingness to pay.  Each of these are either uncertain or depressed in India for reasons summarized below, resulting in a lack of clarity on residual values.

Regulators, policymakers, and market actors can take a range of measures to help increase clarity on the residual value and boost the value of used EV assets. These measures address two key objectives:

1. Increase transparency on the quality of used assets: Reduce information asymmetry to build consumer confidence in used EV transactions.
2. Support the resale of used EVs: Encourage market participation while shifting risks for customers and financiers to drive used EV procurement.

 This report lays out the sequence of actions needed in the near, intermediate, and long term to achieve these objectives.

The actions detailed in the report require coordinated efforts from both government and private sector stakeholders. Although interventions led by government actors can establish the necessary policy frameworks to support a thriving secondary market, it is up to industry actors to implement business practices that support battery traceability and manage residual value risks. A pre-emptive and strategic approach to building a robust secondary EV market presents India with an opportunity to avoid the challenges faced by regions like the United States and Europe, where steep declines in EV residual values have hindered early adoption. By aligning manufacturers, policymakers, financiers, and consumers proactively, India shifts residual value uncertainty into an opportunity — creating a resilient, high-value used EV market that fosters long-term confidence in electric mobility.