Listen to the article
Guide to Invest in EV
- Are you also wondering how to invest in EVs? Investing in electric vehicles (EVs) has become a significant trend, offering exposure to a rapidly growing market. As private companies are preparing to set up public charging stations, this will soon open a market for investors to participate in structured investment options.
- But why is everyone suddenly talking about EVs in India? Well, it turns out there are a few pretty solid reasons. First up, the government is super keen on going green.
- They’re rolling out incentives and policies that make buying an EV feel like snagging a great deal. Plus, there’s this whole vision to cut down on pollution and make the air cleaner – who wouldn’t want to breathe easier, right?
And it’s not just about the environment. The technology in Indian EVs is getting slicker by the day. We’re talking longer ranges on a single charge, and faster charging times.
In 2023, the total EV sales reached 1.53 million, approximately 1.5x increase from 1.02 million in 2022. This cements Indian consumers’ willingness to adopt EVs and gives an optimistic nod to the Indian government’s plan of drastically reducing emissions by 2030 through non-ICE [petrol/diesel] vehicles.
The Surge of EV Sales and Market Growth
The surge in EV sales and market growth is a testament to the rapidly evolving landscape of electric mobility, showcasing significant milestones and projections that highlight the sector’s potential.
- According to a report by MordorIntelligence, The Indian EV market is on track to grow from USD 34.8 billion in 2024 to USD 110.74 billion by 2029, with a growth rate of 26.05% annually.
- This significant increase highlights the industry’s potential to change India’s car market as we face more environmental issues.
- The government is actively supporting this shift, aiming to cut down on oil dependence and carbon emissions, thereby accelerating the EV market’s development with its target of 30% of private EV car sales, and 70% of commercial EV sales by 2030.
- Yet, this growth depends on making consumers more confident and reducing range anxiety. According to official statistics, 18,000 public EV charging hubs are required in India’s top 9 metros by 2030.
The current global ideal charger-to-EV ratio is 1:15, whereas India currently stands at 1:182.
This can be achieved by setting up enough fast-charging hubs on highways and major crossroads, making longer trips worry-free.
Hence, valuable players entering the industry to reduce the gap are bound to have high growth potential.
Benefits of Investing in EVs
Investing in the electric vehicle (EV) sector, particularly in EV charging stations, presents a burgeoning opportunity that savvy investors are keenly eyeing. As the global narrative shifts towards sustainability and green energy, the EV market in India is not just booming; it’s becoming a goldmine.
1. Growing Market Demand
First and foremost, the surge in EV adoption is palpable. With every passing day, more consumers are opting for EVs, driven by environmental concerns, government incentives, and the increasing economic viability of electric vehicles. This surge directly translates into a growing demand for EV charging infrastructure, marking it a sector ripe for investment.
2. Government Support and Incentives
The Indian government is pushing aggressively for EV adoption through favourable policies, subsidies, and incentives for EV buyers and infrastructure developers. Investing in EV charging stations now could mean benefiting from various incentives, reduced taxes, and grants, making the initial setup and operational costs more manageable and the venture more profitable.
3. Diversification and Sustainable Investment
For investors looking to diversify their portfolios into green energy and sustainable projects, EV charging stations offer a perfect avenue. By investing in this sector, not only do you tap into the fast-growing EV market, but you also align your investments with global trends towards sustainability, catering to an increasingly eco-conscious consumer base.
4. Long-term Growth Potential
The EV market is still in its infancy, especially in India. This early-stage entry allows investors to establish a foothold in what is projected to be a massively expanding sector. As with any emerging technology, early investors have the potential to reap significant long-term benefits as the market matures and expands.
5. Strategic Partnerships and Revenue Streams
Investing in EV charging infrastructure opens avenues for strategic partnerships with commercial properties, residential complexes, and even government bodies, expanding your network and reach. Additionally, EV charging stations offer multiple revenue streams, not just from charging fees but also from advertising, data collection, and ancillary services, enhancing the overall profitability of the investment.
6. Increasing Technological Advancements
With technological advancements, the efficiency and speed of EV charging are continuously improving. Investments in the latest charging technologies can set your stations apart, offering faster and more convenient services, thereby attracting a larger customer base and ensuring customer retention.
EV Charging Stations: A Profitable Investment Opportunity
There is an increasing demand for electric cars (EVs) as the world moves towards a cleaner future. Due to the recent boom in EV use, investing in electric car charging stations has become a lucrative business prospect. Aside from the environmental advantages, forward-thinking investors and businesses are becoming interested in EV charging station investments due to their profitability.
The government is incentivising private players to enter the sector and build fast charging stations while sanctioning the construction of 2,877 EV charging stations along with 1,576 stations spread across 16 highways and 9 expressways under the FAME act.
As private companies are preparing to set up public charging stations, this will soon open a market for investors to participate in structured investment options.
Right now, Assetmonk has curated a fixed-income product from the EV public charging sector that will help a promising company set up public charging stations with fast chargers across Southern highways touching 18 cities, including Bengaluru, Chennai, Vizag, Hyderabad, Vijayawada, and Tirupati.
Government initiatives to promote EV investing in India
In order to achieve India’s goal of reaching net zero emissions by 2070 and promote the growth of Electric Vehicles (EVs), the government has implemented several policy interventions. These measures aim to facilitate the expansion of the EV sector and achieve ambitious targets for EV sales penetration by 2030:
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme: Launched in 2015, this scheme aims to reduce reliance on fossil fuels and address vehicular emissions. Phase-II of the scheme, implemented from April 1, 2019, has a budget of INR 10,000 Cr ($1.2 Bn) over 5 years. The majority of the funds are allocated to create demand for EVs by supporting the production of e-Buses, e-3 Wheelers, e-4 Wheeler Passenger Cars, and e-2 Wheelers.
Production Linked Incentive (PLI) Scheme for the Automotive Sector: Unveiled in September 2021, this scheme has a budget of INR 25,938 Cr ($3.1 Bn) and aims to boost domestic manufacturing of advanced automotive technology (AAT) products. It targets the production of electric and hydrogen-powered vehicles, as well as high-value and high-tech components.
PLI Scheme for National Programme on Advanced Chemistry Cell (ACC) Battery Storage: Launched in 2021, this scheme encourages the manufacturing of ACC in India. It has an outlay of INR 18,100 Cr ($2.1 Bn) over seven years. Incentives will be given on the sale of batteries manufactured in India, and three companies with a total manufacturing capacity of 30 Gwh have been selected so far.
Moreover, the government has implemented additional measures to support green mobility:
- Customs duty exemption on machinery for the manufacture of lithium-ion cells for EV batteries.
- Reduction of GST on electric vehicles and chargers.
- Green license plates and exemption from permit requirements for both commercial and private battery-operated vehicles.
- Waiver of road tax on EVs to reduce initial costs.
Revised guidelines and standards for public EV charging infrastructure, facilitating private players’ installation of EV charging stations. Oil Marketing Companies have also announced plans to set up 22,000 EV charging stations in prominent cities and on national highways across India.
Bottom Line
India’s EV market is growing quickly. Plans are in place to help the country fully depend on EVs. Right now, we need more public charging spots, which gives investors a great chance to add this new sector to their portfolios.
From an investor’s angle:
- The government is really encouraging private companies to get involved in public EV charging. They’re offering incentives to help out.
- More and more people are buying EVs. Sales went up 1.5 times last year, which is a good sign. This means that lots of people will use and pay for public charging stations.
Are you thinking of investing in the EV charging business? Now’s a smart time to start!
Assetmonk is a new-age alternative realty investment platform focusing on structured quality deals from real estate, one of the most profitable asset classes once only accessible to the 1%. You can invest in asset-backed investment products and earn assured IRR.
FAQs
1. How can I invest in Electric Vehicles (EVs)?
A. Investing in EVs can be done in several ways. You can directly invest in EV manufacturers or suppliers, such as companies that produce EV batteries or charging equipment. Another option is to invest in EV-focused exchange-traded funds (ETFs) or mutual funds, which provide a diversified approach to investing in the EV sector.
Additionally, you can invest in EV-related infrastructure projects like EV charging stations through alternate investment platforms like Assetmonk and earn assured returns.
2. What should I consider when investing in EV infrastructure?
A. When investing in EV infrastructure, there are a few key factors to consider. Firstly, assess the growth potential of the EV market in the specific region or area where you intend to invest. Look for locations with supportive government policies and EV charging station installation incentives.
Evaluate the financial stability and reputation of the companies involved in the infrastructure project. Additionally, the infrastructure’s scalability and future-proofing should be considered to accommodate the increasing demand for EVs.
3. How does electric mobility impact the EV investment landscape?
A. Electric mobility, driven by the transition to EVs, significantly impacts the EV investment landscape. The growth of electric mobility creates opportunities for companies involved in EV production, charging infrastructure, battery technology, and related services. As the adoption of EVs expands, the demand for EV-related investments is expected to rise, potentially leading to attractive returns for investors.
4. What are the benefits of investing in EV charging stations?
A. Investing in EV charging stations can provide several benefits. First, as the EV market continues to grow, the demand for charging stations is expected to increase, creating a potentially lucrative investment opportunity. Second, investing in charging stations contributes to the development of EV infrastructure, which is vital for supporting widespread adoption of EVs. Third, investing in charging stations can generate a steady stream of revenue through charging fees or leasing agreements.
5. Are there any risks associated with investing in the EV sector?
A. Like any investment, the EV sector has risks. Some potential risks include regulatory changes that could impact the EV market, technological advancements that may render current investments obsolete, competition within the sector, and unforeseen market fluctuations. It is essential to conduct thorough research, diversify your portfolio, and consider seeking professional financial advice before making any investment decisions in the EV sector.
