Alert! It’s Hightime!
To Make An Investment In The Upcoming E-Surge
The recent upsurge is aimed at making India a global leader in electric mobility for technology and automobile companies. We expect India to develop a robust and affordable electric mobility ecosystem, including production facilities and a large network of charging points, in order to achieve three key strategic goals: reducing carbon emissions, creating new employment opportunities, and reducing the use of crude oil, which accounts for about 80% of the country's requirement.
Many companies have taken the risk of installing charging stations in order to take advantage of the opportunities presented by the shift to electric transportation. With the government's major push, India's EV industry can expect a significant facelift.
Generally, in our blogs, we discuss the most popular stocks; however, today, we'll take a look at the top EV stocks from each sector and the types of returns they are providing to investors.
Tata Motors, Olectra Greentech, JBM Auto, Ashok Leyland, SML Isuzu, Eicher Motors, and M&M are among the leading EV stocks in the commercial vehicle space. Now, let's take a look at the stock performance of these companies over the last year.
This is the most logical option for investors interested in the EV opportunity. Tata Motors is in the four-wheeler segment, while TVS Motors, Bajaj Auto, Hero MotoCorp, and Greaves Cotton are in the two- and three-wheeler segments, respectively.
Although there are several gaps in the 4-wheeler EV space, including a scarcity of products, high prices, and insufficient battery capacity, companies have ambitious future plans. The following chart summarises the performance of the segment's top stocks this year.
Lithium-ion (Li-ion) batteries power electric vehicles. These batteries are the most expensive component of an electric vehicle, accounting for 40% to 50% of the total cost. For years, China served as the primary supplier. However, companies are now accelerating plans to manufacture lithium-ion cells in the country, hoping to benefit from Rs 180 billion in government subsidies.
Amara Raja Batteries, Exide Industries, and Kabra Extrusion Technik are the segment's leading players. The following chart illustrates the performance of the stocks over various time periods.
EV manufacturers are investing significant resources and energy in charging station infrastructure. To accelerate the adoption of electric vehicles in India, the government plans to install up to 70,000 charging stations across the country over the next few years. Oil companies such as Indian Oil Corporation and BPCL have already committed to utilizing their outlets to establish 17,000 EV charging stations.
Tata Power, Indian Oil Corporation (IOC), BPCL, Reliance Industries, NTPC, and Power Grid Corporation are among the leading publicly traded companies operating in this space. The following table summarises the performance of the stocks mentioned above in the charging infrastructure segment this year.
To expand the market for specialty products, chemicals companies have entered the lithium-ion battery business, with the goal of establishing an integrated operation that includes cell manufacturing, battery recycling, and battery production.
Tata Chemicals, Gujarat Fluorochemicals, Neogen Chemicals, and recently listed Tatva Chintan Pharma are the leading stocks in this space. The following chart illustrates the performance of the stocks over various time periods.
Indian auto ancillary manufacturers are collaborating with global manufacturers in areas such as wiring harnesses, rearview mirrors, cockpits, and bumpers. Companies such as Sona BLW Precision, Motherson Sumi, Suprajit Engineering, Minda Industries, and FIEM Industries have either announced acquisitions of EV technology companies or are expanding their component business with an eye toward the global market. The following chart summarises how the top companies have rewarded investors over the last year.
Demand for commodities such as lithium, cobalt, copper, and nickel is already increasing as EV demand grows. Due to the fact that these metals are scarce and are the most frequently used in the manufacture of electric car batteries, there may be a supply shortage. This is encouraging news for Hindustan Copper, NALCO, and Hindalco. These companies stand to benefit significantly from the transition from internal combustion engines to electric vehicles, as the primary commodities used in EVs are copper and aluminum. The following table illustrates how much you would have today if you had invested Rs 100 in each stock a year ago.