Electric vehicles (or EVs as they are popularly referred to) have cast off their niche label and entered the mainstream market for good during the past decade. Powered by batteries and electric motors instead of fuel combustion engines, EVs are greener solutions that can significantly mitigate the climate crisis.
Due to their direct correlation with positive environmental effects, governments across the globe are incentivising the usage of electric vehicles by extending support through budgets for energy transitions and essential infrastructure like charging stations. Besides US auto bigwigs like Tesla and General Motors and Japan’s Nissan, several companies in India have now ventured into the production of EVs and their parts like batteries, motors, and charging equipment.
With this climate-conscious mobility supported by conducive state policies and low production costs in the country, there is palpable optimism around EV companies among Indian investors. By leveraging the knowledge and technological insights offered by international partners, India is on its way to harness the true potential of the EV market. Naturally, the coming years hint at incredible growth for electric vehicle stocks in India, making it an investment that could lead to solid returns.
What are EV stocks?
EV stocks represent equities of companies involved in the electric vehicle (EV) ecosystem. This encompasses manufacturers of electric cars, components, batteries, charging infrastructure, and related technology providers. As the global shift towards sustainable transportation accelerates, the EV industry has emerged as a focal point for investors.
Why invest in EV stocks in India?
India presents a compelling investment landscape for EV stocks due to several key factors:
- Government support: The Indian government has unveiled ambitious plans to promote electric mobility, including subsidies, tax incentives, and infrastructure development. This policy framework creates a conducive environment for EV companies to flourish.
- Growing market: The country's burgeoning middle class, coupled with rising fuel prices and environmental concerns, is driving demand for electric vehicles. This presents a significant growth opportunity for EV players.
- Cost competitiveness: India's robust manufacturing base and cost-effective labour pool position domestic EV companies favourably in terms of global competitiveness.
- Technological advancements: The Indian EV industry is witnessing rapid technological advancements in battery technology, charging infrastructure, and vehicle design, enhancing the appeal of EV stocks.
- Diversification benefits: Investing in EV stocks can offer diversification benefits to an investment portfolio, as the sector is relatively nascent and less correlated with traditional automotive stocks.
It is essential to conduct thorough research and consider factors such as company financials, market competition, and technological capabilities before making investment decisions in the EV space.
Additional reading: How to invest in US stocks from India
Trending EV stocks in India
Here’s a list of the popular electric stocks in India that you can consider investing in.
- Tata Motors
One of the most esteemed automakers in India, Tata Motors offers two marquee electric cars—Nexon EV and Tigor EV. For the production of electric powertrains, the company has also collaborated with Jayem Automotives based in Coimbatore. Beyond India, Tata Motors has established a strong international foothold in various regions of Asia, Europe, the Middle East, the Americas, Russia, Africa and Oceania. - Mahindra & Mahindra
With a presence in multiple segments, including auto and clean energy, Mahindra & Mahindra is the producer of e-Verito and e-KUV100 electric cars. Likewise, the auto giant caters to prominent markets like North America, Italy, Japan, and South Korea with its manufacturing facilities and R&D centres. - Bajaj Auto
Renowned for its motorcycles and scooters, Bajaj Auto is now becoming one of the leading manufacturers of electric two-wheelers and EV parts. The company has also forayed into the production of electric three-wheelers, i.e., passenger auto rickshaws. With a number of international subsidiaries, Bajaj Auto also exports its two and three-wheelers to countries in Africa, Asia, Europe, Latin America, and the Middle East. - Hero MotoCorp
Another one of India’s well-known two-wheeler brands, Hero MotoCorp is the latest participant in the EV segment with its electric scooters like eMaestro and ePleasure. By using its manufacturing prowess and robust distribution system, the enterprise has big plans to drop a lineup of EVs in the near future. - Exide Industries
Capitalising on the burgeoning demand for EV parts in India, Exide Industries has set out to manufacture lithium-ion batteries. As India’s biggest producer of batteries, the company has abundant experience and capacity for innovation to reinforce the EV expansion in India. - Ashok Leyland
With its roots in Chennai, Ashok Leyland is widely acclaimed for its commercial transit vehicles. Under the brand label Circuit, the manufacturer has kicked off the launch of electric buses and trucks in India. With its entry into the EV domain, Ashok Leyland’s offerings can help create a ripple effect of sustainability by allowing other businesses to invest in carrier vehicles with low emissions. - HBL Power Systems
A leading name in the battery and power electronics sector, HBL Power Systems is a supplier to several industries across the globe. Having partnered with EV manufacturers in India, it is scaling up the production of batteries to meet the rising demands, signaling long-term financial growth for the company.
Segments of the electric vehicle sector
The electric vehicle (EV) sector comprises several key components:
Auto manufacturers
Auto manufacturers engage in the design, production, and distribution of automobiles. Traditionally focused on internal combustion engine (ICE) vehicles, these companies are increasingly incorporating electric and hybrid models into their portfolios. Leading industry players include established names such as Toyota, Ford, and General Motors, as well as newer entrants like Tesla, which specializes in electric vehicles. The sector is characterized by ongoing innovation, technological advancements, and adaptation to evolving consumer preferences and environmental regulations.
Battery manufacturers
Battery manufacturers are critical to the EV ecosystem, developing and producing energy storage solutions for various applications, including electric vehicles, consumer electronics, and renewable energy systems. Key industry participants include Panasonic, LG Chem, and CATL. As demand for electric vehicles and renewable energy grows, battery manufacturers play a pivotal role in advancing battery technology, enhancing energy density, efficiency, and sustainability to support the broader transition to clean energy.
Auto parts and EV software
Auto parts manufacturers supply components essential for vehicle assembly, encompassing everything from engines to electronics. Within the EV space, companies specializing in EV software are increasingly significant, developing software solutions for battery management, energy efficiency, and connectivity. Both traditional auto parts suppliers like Bosch and Delphi, as well as software-focused companies such as NVIDIA and Aptiv, contribute to the evolution of the automotive industry, driving advancements in both conventional and electric vehicles through hardware innovation and sophisticated software integration.
Charging infrastructure
A robust charging infrastructure is essential for widespread EV adoption. Companies like ChargePoint and Tesla operate extensive charging networks, providing convenient access for EV owners. Strategic placement of charging stations in urban areas and along major transportation corridors is crucial for facilitating long-distance EV travel. The expansion and accessibility of charging networks significantly influence EV market penetration by mitigating range anxiety and supporting the shift towards sustainable transportation.
Overview of the EV industry in 2024
The EV industry is experiencing unprecedented growth and innovation in 2024. As global focus on sustainable mobility intensifies, established automakers and emerging EV companies are introducing cutting-edge models that push technological boundaries. Advancements in battery technology, expanding charging infrastructure, and supportive government policies are accelerating industry development. Investor interest in the EV sector is robust as consumers increasingly prioritize environmentally friendly transportation options. Collaborations between traditional automakers and technology companies are reshaping the industry, emphasizing connectivity and autonomous driving capabilities. With a strong emphasis on reducing carbon emissions and environmental impact, the EV industry is at the forefront of transformative change, defining the future of transportation.
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Factors to consider before investing in EV stocks in India
While the top-performing EV stocks in India are currently all the rage, some significant factors shouldn’t be overlooked before you finalise your investment choices.
1. Healthy financials
The EV segment is fiercely competitive. So, it is essential to pick a company with solid revenue channels, steady profits, and justified debt levels that can secure and boost your investments.
2. Innovation
Technology is indispensable to the prosperity of an EV company. Before you commit to a stock, make sure to check the company’s dedication to technological innovation that would enhance the efficiency, safety, and performance of EVs.
3. Competition
With an increasing number of automakers delving into EV manufacturing, it is crucial to chalk out their respective USPs to draw comparisons that enable you to make the ideal investment choice.
4. Policymaking
The government has implemented several policies like tax breaks and similar financial incentives for the rollout of EV infrastructure in India. Determine how these regulations can benefit the growth of firms you are planning to invest in.
5. EV infrastructure
A nationwide network of charging and battery-swapping stations is paramount for the success of EVs in India. Verify if your chosen automaker has made this infrastructure accessible enough as it would be critical to maintain the efficacy and relevance of EVs.
6. Global partnerships
Several automobile brands have collaborated with international businesses for knowledge exchange, manufacturing muscle, and seamless supply chains. Check for such partnerships, as they can put certain EV companies ahead in the game and generate substantial profits.
Also read: Know Share Market Basics
Conclusion
EV companies are still in their nascent stages of innovation and rollout in India. However, they exhibit promising future gains. Naturally, this makes electric vehicle stocks in India a wonderful investment opportunity. However, before investing in this sector, certain factors should be taken into account, like the company’s financial credentials, reputation, and technological ingenuity. Ensure that you meticulously go through all the features of EV stocks in India to make lucrative additions to your portfolio.
