And you know why are you investing and where many people do theme-based investing too And in this there is one theme that you all want to know, Electric Vehicles (EVs) Many people want to know what all govt policies are coming up that will incentivize the EV sector.
And with this we will also discuss the stocks related and how will they be impacted by growth.
so let's start In India, EV sector is still in the nascent stage, and if we consider other aspects as pollution levels that tell us a big shift might happen That the current cars working on internal combustion may shift to EV We as a country may see a lot of benefits due to this shift and the pollution levels will also decrease.
But we will also face many challenges like the upfront cost of the electric battery is high and how we can reduce it in the future Other than this is the charging system that is not quite developed in India So the central and state govt's keep bringing initiatives to incentivize this sector to make that mental shift happen.
The govt has already come up with initiatives named FAME, FAME-II, National Electric Mobility Mission Plan, 2020, and Go Electric 16 state govts have planned their EV initiatives, I will try to show you the timeline for the same In 2013, National Electric Mobility Mission Plan 2020 was launched, FAME in 2015, Karnataka EV policy was approved and Telangana EV plan was drafted in 2017, followed by Andhra Pradesh and Uttrakhand approving their plans in 2018.
Many other states like Delhi, Punjab, Maharashtra, Bihar, Kerala, UP, Madhya Pradesh, and Tamil Nadu and in 2020, Telangana approves its EV policy in 2020 Many govts offer incentives and subsidies other than policies, for example, Delhi govt provides a 5% deduction if you buy an EV Let me now tell you about other states providing incentives and subsidies on EVs.
in short At no 1 is Delhi that provides subsidies on 2, 3 wheelers, cars, light, and buses followed by Bihar in 2,3 wheelers, car and bus segment Maharashtra provides a 15% subsidy on the base price for 2, 3 wheeler, and bus Gujarat also provides subsidy and here it is explained that what incentives we can get Kerala provides subsidies up to Rs.30000 on 3-wheelers.
Till now you might have got to know how state and central govts incentivize EVs but if we see the overall growth in this sector To grow the charging segment will be the most important for the growth of this sector Many steps have been taken up by the govts to ramp up the charging infrastructure as it is one of the main growth drivers Incentives like direct subsidy on purchase of EVs up to 25-50% ranging between Rs.50k - 10L.
Second incentive like reduced lease charges for opening a charging station as compared to a petrol pump Many steps have been taken up by the govt to make energy directly accessible from the renewable energy Other than many initiatives have been taken up by the govt to open charging stations in remote places, We have now seen the 2 incentive structures, one for buying EVs and other for charging infrastructure.
The third and the most important is incentivizing manufacturing, how to reduce the making cost The govts have tried to incentivize it many times and also the auto components Let me now show you the initiatives the govt has come up to grow this sector The first is capital subsidies done by Karnataka that gives subsidies to MSMEs, Large, Mega, and Ultra-mega businesses You can get a capital subsidy of worth 1.5 to 5 million or 25% .
Andhra Pradesh also provides subsidy to all these segments from 1.5 to 50 million, 10% of investment, 10% of first 2 units Other than them, Kerala, Tamil Nadu, and Telangana have also planned to subsidize manufacturing.
We have talked about the growth in the sector and how the govt plans to incentivize Let us now move to the second part where we will tell you the companies connected in the value chain.
1.Tata Motors
At first, is Tata Motor
s that comes under the manufacturing part of the value chain. They have come up with 3 EV variants in the car segment and have delivered more than 200 EV buses If we some of its financials, its market cap is around 121429 Crs, and cannot discuss its PE ratio as it is a loss-making company.
But recently its share price has shown improvement, traded at around below 100 is now currently around 350.
2.M&M
The 2nd company is M&M whose market cap is more than 90000 Crs. They have a special subsidiary named Mahindra Electric to focus on this segment and have shown good presence in 3 and 4 wheeler segment, They launched e-verito and e-alpha where they have shown great presence.
Its PE ratio is around 53 and have given 53% return in the past year.
3.Ashok Leyland
The next is Ashok Leyland that is the 3rd player in the manufacturing segment They have a UK subsidiary named Switch Mobility that want to concentrate on how to bring EVs Its market cap is around 36000 Cr and has given 53% return in the past year to its investors.
4.Maruti Suzuki
The 4th company is the market leader, Maruti Suzuki with a market cap of 2.25 lakh Crs They are planning to bring their first EV named WagonR by 2022, and they are the biggest player in the PV segment The company's ROE is around 8% and has given 28% return in the past year to its investors.
5.HeroMotor corp
On 5th is HeroMotor corp that has the largest share in the 2-wheeler segment, they don't have a formalized business concentrated to EV They are planning to come up with an EV by 2022 and have also invested in the well-known Ather Energy for electric scooters, Their market cap is around 58000 Cr and its PE ratio is around 20.
After this, TVS and Bajaj Auto that manufacture 2 and 3 wheelers are also planning to launch EVs by 2022 There are 2 main companies in the battery manufacturing segment named Exide batteries and Amara Raja batteries, And you might have heard these names.
so if the EV segment grows and they are able to adapt, they will acquire a good market share Lastly, Tata Power is trying to develop the whole EV infrastructure, and have deployed 400 charging stations in 65 cities Its market cap is around 39000 Crs, PE ratio is above 50 and has given 174% returns in the past year.
**Disclaimer
hey guys just a disclaimer any stocks or fund that have been mentioned in this article is only for educational purposes we do not recommend a buy or sell in anything investments in securities market are subject to market risks read all the related documents carefully before investing please read the risk disclosure documents carefully before investing in equity shares derivatives mutual fund and or other instruments traded on the stock exchanges
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