EV Investment Sector In India
The electric vehicle (EV) market in India has expanded notably in recent years and is now being pegged for even more impressive growth in the near future. Recent reports concerning the potential of the EV market note that its value as of 2021 was roughly USD 1.45 billion. The same reports, however, project that the coming years will lift that value toward USD 114 billion in just the next six years. This indicates that while EVs in India may still be in something of a fledgling stage in 2023, the broader climate for EV investment is extraordinarily favorable.
Four factors, in particular, are poised to boost the EV sector and reward investors in said sector moving forward.
Focus on Infrastructure and Supply Chain
When we think about the EV investment sector, it is natural to think first of the vehicles themselves. Sure enough, there is and will continue to be plenty of opportunity for financial success tied to these vehicles and their manufacturers. More broadly, however, the EV investment sector also incorporates widespread opportunities in infrastructure and supply chain innovation.
Per the aforementioned reports concerning the projected growth of the EV market, there are two primary components of EV supply chains providing opportunities for investment. The first is the semiconductor industry. Semiconductors are essential in the design and construction of multiple parts of electric vehicles and will thus be in tremendous demand as the vast potential of the Indian market is realized over time. The second major component of EV supply chains is the Lithium-Ion cell business. These cells can account for half the cost of a given EV and will need to be produced efficiently and en masse as demand for electric vehicles continues to grow.
Infrastructure expansion also provides a great deal of opportunity for investment. Putting more EVs on the roads in India is one thing, but the so-called electric vehicle “revolution” cannot truly take effect unless those roads and their surrounding communities are equipped to handle the change. This speaks to a necessity for India to build innumerable new improvements. First and foremost, new stations for charging vehicles provide massive investment opportunities in cities and even in remote areas. The emergence of these stations is already underway, with government support having helped close to 1,000 charging facilities emerge in metro areas already. Additionally, there will be a need for stations that facilitate battery swapping – likely to be a less regular practice than charging, but essential for widespread EV use nonetheless.
Electric Vehicles in Use
Another factor contributing to the favorable environment for EV investors in India is the number of related vehicles that are already on the road. In 2022, the Indian government produced a report indicating that there were already more than 13 lakh electric vehicles in use throughout the country.
The report came specifically from the Ministry of Road Transport and Highways and further indicated that there were just over 278 million non-electric vehicles operating throughout the country. Altogether, the numbers showed that EVs in 2022 made up just 0.4% of all motor vehicles. This is a small percentage, but if anything, it points to the fact that most of the EV growth that will be seen in India is still to come. Market expansion toward the expected USD 114 billion by 2029 will mean more infrastructure and potentially exponential growth in the number of EVs on the road in India.
EV-Related Stock Investment
Further boosting the broadly favorable environment for EV industry investment is the fact that private investors are already beginning to purchase more EV-related stocks. Opportunities for trading stocks related to this industry have become prevalent online, so much so that it is now easy for investors throughout India to buy into related companies of their choice. Markets and stocks from around the world are available on reliable platforms, such that investors who have educated themselves on the EV revolution can efficiently conduct trades at the most up-to-date prices.
As to which EV stocks are benefitting from this kind of widespread trading activity, the list is long. The following, however, are some noteworthy EV stocks private investors are buying up:
- Tata Motors Ltd (NSE: TATAMOTORS): An Indian automobile manufacturer producing EVs. The stock price as of this writing: is 624.20 INR
- Mahindra And Mahindra Ltd (NSE: M&M): A multi-pronged Mumbai business producing automobiles, including EVs. The stock price as of this writing: 1,542.20 IN
- Reliance Industries Ltd (NSE: RELIANCE): An Indian energy business investing in EV technology. The stock price as of this writing: is 2,450.10 INR
- Olectra Greentech Ltd (NSE: OLECTRA): An Indian company specializing in the production of electric buses for public transportation. The stock price as of this writing: is 1,172.65 INR
These are only a few of many examples of publicly traded companies operating in the EV space. Private investors’ ongoing interest in buying these stocks, however, is yet another indicator of the excitement and opportunity surrounding the industry in India.
Laws and Reforms
Lastly, it is also important to mention that the Indian government is implementing numerous laws and reforms designed to welcome and accommodate the burgeoning EV industry. The state of Maharashtra has proven to be a leader in this regard, with its leadership having implemented a variety of favorable EV policies specifically designed to invite investment. The following are just a few examples of these policies:
- INR 930 crore toward EV adoption through 2025
- A goal of 3,00,000 EVs sold per year
- Development of 2,375 charging stations in urban areas and across four national highways
- Registration fee and road tax exemption for EV owners
- Extensive electrification of public transportation and existing bus fleets throughout Maharashtra
These are not country-wide reforms, but they are notable examples from a state that has proven to be particularly progressive regarding the arrival of the EV era. The policies directly incentivize the transition to electric vehicles, which in turn encourages further investment in the sector.
It is easy enough, in 2023, to assert vaguely that electric vehicles are on the rise or that they represent the next wave of changes on our roads. What all of these factors demonstrate, however, is an industry that is concretely positioned for growth. Supply chain and infrastructure investment are underway; the emergence of the vehicles themselves has only just begun; private investors are buying into related companies, and government reforms are paving the way for expansion. Altogether, this information amounts to a deeply favorable environment for EV and EV-adjacent investment.
Read More:- What Are the Perks of Getting Yourself an Electric Vehicle?