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Sector Overview – EV charging infrastructure & important stocks

  • Marisha Bhatt
  • Apr 11 2022
  • 9 minutes
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The current war crisis in Europe although between two nations has affected the entire world. One of the most drastic impacts that are faced by the world, India included, is the severe rise in fuel rises. Given this rise and the growing carbon footprint in the world, electric vehicles or EVs are the need of the day. EVs have been part of the global and Indian markets for more than a decade. Today this sector has made significant progress and is only going to see an increase in the same hereon. 

In India, the government is giving a lot of push in the form of incentives and subsidies to promote the EV sector in the country and gradually phase out the ICE (Internal combustion Engines). The state governments of the country are also doing their bit by adding e-buses in the state. 

The current EV market in the country is categorized as per the propulsion type (battery EV, plug-in EV, and fuel cell EV) as well as based on vehicle types (2 wheelers, 3 wheelers, 4 wheelers, buses, and trucks. The Indian EV market was valued at approximately $1434billion  in 2021 and is expected to grow at a CAGR of 47.09% and reach $15397 billion by 2027. The year 20321 saw a 168% year-on-year growth in the combined EV sector with the sales picking up from June 21. 

Power needs of EVs based on battery and power type

For the EV sector to thrive in India, the country needs to have a robust EV charging infrastructure. The government has come out with many measures and plans to set up EV charging infrastructure across the country to support and promote the EV sector. The basic requirements of the EVs based on the overall Indian EV sector as per the data collected by Niti Aayog and the Ministry of Power are highlighted below.

VehicleBattery CapacityBattery Voltage
E-2W (Two Wheelers)1.2-3.3 kWh48-72V
E-3W (passengers/goods)3.6-8kWh48-60V
E-cars (1st Generation)21 kWh72V
E-cars (2nd Generation)30-80 kWh300-500V

EV power needs based on power ratings and power type

Type of chargingPower levelCurrent typeCompatible EV segments 
Normal Power Charging P<=7kWAC & DCE-2W, E-3W, E-cars, and other LCVs (up to 1 ton)
Normal Power Charging 7kW<P<=22kWAC & DCE-2W, E-3W, E-cars, and other LCVs (up to 1 ton)
High Power Charging 22kW<P<=50kWDCE-cars, LCVs, MCVs (1-6 ton)
High Power Charging 50kW<P<200kWDCE-cars, LCVs, MCVs (1-6 ton)

Charging infrastructure solutions 

There are three types of charging solutions available for the Indian customers. The details of these available options are mentioned below.

Type of charging solutionPrivate charging Semi-public chargingPublic charging
UsageThis type of charging is suitable for a personalized charging station for personal EV or EF FleetThis type of charging is ideal for a shared charging station for notified EV usersThis is the shared charging station for the general public
LocationsSuch charging stations can be in independent homes, dedicated parking spaces in any apartment or offices, any notified location with land availabilityThis type of charging stations can be in apartment complexes, office campuses, gated communities, government buildings, universities, shopping malls, hospitals, etc.This type of charging can be in public parking lots, on-street parking, charging plazas, petrol pumps, highways, metro stations
OwnershipThe ownership of this type of charging is with individual EV owners, EV fleet owners, or operatorsThe ownership of this type of charging point is under host properties, Charge Point Operators (CPOs) OEMs (Original Equipment Manufacturers)The ownership of this charging type of municipal authorities, PSUs, CPOs, host properties
OperationsThe charging point is self-operated or CPO-managedThe charging point is CPO-managedThe charging point is CPO-managed

Alternative battery charging method

The above data shows that the overall charging infrastructure needs of the country are quite extensive. This scenario is when the EV sector is still at a very nascent stage in the country. As the sector grows the charging infrastructure needs will increase accordingly. On average, an EV battery will require anywhere between 60 minutes to 9 hours to be fully charged. In case of rapid charges also the minimum time taken would be approximately 30 minutes. This will be highly cumbersome for the ultimate customers and also is a deterrent factor that keeps many potential customers away from the EV sector. Also, the cost of a battery in an EV is among the highest costs of the vehicle. Given the current scenario of the growing uncertainty, the cost of essential raw materials for battery manufacture like nickel, copper, cobalt, etc. have increased substantially. This has resulted in a steep rise in the battery costs for EVs.

The Government of India viewing these factors has announced a new policy for the EV sector. This new policy is based on the concept of battery swapping and will have interoperable standards. The complete details of this program will be finalized soon and provided to the general public. The concept of battery swapping will allow the customers to swap their drained or already used batteries with fully charged ones at the respective charging stations or outlets. This policy will initially focus on battery swapping for E-scooters, 3-wheelers (autos), and motorcycles, before proceeding to other EVs. The policy also has incentives for the customers up to 20% of the subscription or the total lease cost of the battery. 

Pros and cons of battery swapping

The various pros and cons of the battery swapping program proposed by the government are mentioned hereunder

Pros

Some of the key benefits of the battery swapping program are,

  1. The charging process is completed within minutes without the need to spend hours waiting for the battery to be charged fully.
  2. Companies can set up separate charging stations that can be away from swapping points as per their internal guidelines and cost-benefit analysis that will ultimately benefit their bottom line. 
  3. Customers will benefit since this will reduce the overall cost of EVS as the cost of the battery will be replaced by the lease cost for the battery
  4. Enhanced battery life conditions as the charging can be in a more controlled environment.

Cons 

The limitations in using the battery swapping program are mentioned below.

  1. No standardized model of battery for different EV manufacturers
  2. Need for an increased number of batteries for charging the same number of EVs in the market.
  3. Longer time is usually taken by OEMs for adopting the charging model
  4. The increased cost of battery leasing over the life of the EV
  5. Higher rate of GST applicable on separate battery which is 18% as against any battery sold which is sold along with EV which is charged at 5%. 

Top EV charging Infrastructure stocks in India

a. Reliance Industries Limited

Reliance Industries Limited has a huge network of petrol pumps across the country and plans to open a lot more in the next 5 years. The company has recently acquired substantially all the assets of Lithium Werks. The company has more than 30 years of expertise and experience in the production of nearly 200MWh annual capacity including coating, cell, and custom module manufacturing capability. The key details of Reliance Industries Limited are tabled below.

CategoryDetails
Market Capitalization Rs. 18,01,818.03 crores
PE Ratio31.21
Return on Equity9.27 (March 21)
Debt Equity Ratio0.36 (March 21)
Promotor’s Holdings50.62%
Share priceRs. 2663.70
Dividend Yield0.26%

b. Tata Power Company Limited

Tata Power Company Limited has a large network of EV charging stations across 40 cities in the country. It has set up MOUs with IOCL, HPCL, IGL, MGL, and the Government of India to develop the charging infrastructure. The key details of the company are tabled below. 

CategoryDetails
Market Capitalization Rs. 80,506.58 crores
PE Ratio49.35
Return on Equity2.91 (March 21)
Debt Equity Ratio2.08 (March 21)
Promotor’s Holdings46.86%
Share priceRs. 251.95
Dividend Yield0.62%

c. BPCL 

Bharat Petroleum is the second largest company in India in the oil marketing segment. The company has approximately 44 charging stations across the country and has plans to integrate its conventional charging stations as EV compliant. The basic details of this company are tabled below.

CategoryDetails
Market Capitalization Rs. 82,474.99 crores
PE Ratio49.35
Return on Equity39.55 (March 21)
Debt Equity Ratio0.89 (March 21)
Promotor’s Holdings52.98%
Share priceRs. 380.20
Dividend Yield20.78%

d. IOCL

Indian Oil Corporation Limited is the largest company in the country in the oil refining  and petroleum marketing segment. This company has approximately 48 EV charging stations and 30 battery swapping stations across the country the key details of the company are tabled below.

CategoryDetails
Market Capitalization Rs. 1,15,088.09 crores
PE Ratio4.19
Return on Equity19.85 (March 21)
Debt Equity Ratio1.04 (March 21)
Promotor’s Holdings51.50%
Share priceRs. 122.30
Dividend Yield9.82%

e. ABB Limited 

ABB Limited is the manufacturer of electric motors, generators, transformers, and electricity distribution and control apparatus. The key details of the company are mentioned below.

CategoryDetails
Market Capitalization Rs. 45,177.81 crores
PE Ratio84.84
Return on Equity6.15 (March 21)
Debt Equity Ratio0.00 (March 21)
Promotor’s Holdings75.00%
Share priceRs. 2130.55
Dividend Yield0.24%

Conclusion

EV is the future of transportation and EV stocks in the charging infrastructure sector, as well as the EV manufacturing sector, has seen a huge boom in recent years. India is part of the vision which aims to have 30% EVs out of the total vehicles in the country by 2030. Backed by the many government initiatives, incentives, and subsidies the EV sector is set to meet this goal in an efficient manner. 

FAQs

What is the segment-wise contribution of EV sales in 2021?

The segment-wise contribution of EV sales in 2021 is tabled below.
Vehicle segment  Contribution to sales in 2021
E-2W 48%
Electric L3 45%
Electric L5 3%
Electric 4W 4%

Who are the top players in the E-2W segment?

The top players in the E-2W segment in 2021 in terms of market share are,
-Hero Electric – 34.56%
-Okinawa Autotech – 20.48%
-Ather Energy – 12.13%
-Pure EV – 8.03%
-Ampere – 7.85%

Who are the key players in the EV charging infrastructure globally?

Some of the key players in the EV charging infrastructure globally are ABB, ChargePoint, Inc., Eaton., ClipperCreek, Inc., Honeywell International Inc, Pod Point., Tesla, etc.

Can a robust EV charging infrastructure be available in India by the end of 2022?

No. The government is aiming to maximize the availability of charging infrastructure throughout the country but it is an uphill task and will take years in making. So availability of a robust EV charging infrastructure in India by the end of 2022 is nearly impossible.

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