Part –2

As discussed earlier in Electrifying Stocks Part – 1, electric vehicle is a vast sector and can be diversified in many ways. Classification of electric vehicle can also be done based on wheel drives i.e. 2 wheelers, 3 wheelers, 4 wheelers and passenger vehicles. In this Part we will focus on companies dealing with 2 and 3 wheeler vehicles.

Sales of Electric 2 & 3 wheeler have increased all over the world in last 2 to 3 years and will increase more going further.

Figure 1: EV 2&3 wheeler sales and prediction

Government of India as well as state governments of India have been boosting Electric vehicle sales by providing PLI schemes, subsidiaries and many other benefits. These steps are taken in order to make people aware regarding climate change due to carbon footprints made by normal vehicles.

Figure 2: State wise sales report of EV  2 & 3 wheeler

Let us see difference between electric vehicle and petrol vehicle costing including fuel and maintenance cost. Here we will consider Rs 10/- per unit electricity and Rs 100/- per liter petrol and irrespective of cost of vehicle.

Figure 3 Cost Comparison between EV scooter and Petrol run scooter

From above comparison, it can be said that electric vehicles are low cost vehicles and with addition of government subsidies into it, they might be the future of mobility across the globe.

Stocks related to EV 2 wheeler and 3 wheeler are:

1. TVS motors

TVS Motor will invest Rs 1,000 crore to set up a dedicated factory for the manufacturing of both two-wheelers and three-wheelers with a capacity of around 1 lakh units a year. The company is also developing an integrated vehicle structure, with manufacturing of battery and other critical parts managed in-house. TVS has also partnered with BMW for jointly manufacturing and selling of EV bikes in India and internationally. TVS has also partnered with Ultraviolette Automotive Pvt. Ltd. (non – listed company) for production of Ultraviolette F77 motorcycle.

2. Bajaj Auto

Bajaj Auto presently sells an electric scooter under the Chetak brand. Bajaj Auto is restructuring its joint venture with KTM AG to get better access to EV technology from its parent company Piere Mobility AG (PMAG) and also planning to commercially launch its first electric three-wheeler in the second half of the 2022 financial year (FY). As of FY20, Bajaj Auto had a market share of 57% of the three-wheeler segment. The company also has a partnership with shared-mobility startup Yulu. The company is also working on making Electric Quadricycle and is planning to setup a completely separate unit for EV segment to leverage the growth opportunities.

3. Hero MotoCorp

Hero MotorCorp has already launched EV vehicles in India under the brand Ather Energy. Ather Energy is setting up its second manufacturing facility, which will expand its capacity to 4-lakh vehicles per year from 1.20 lakh units at present along with key focus on lithium – ion batteries manufacturing. Hero MotoCorp has also tied up with Taiwan’s Gogoro to develop Hero-branded EVs battery-swapping and smart mobility innovation for Indian market. With all this advancement in line up the company is planning complete ecosystem comprising of Hero MotoCorp’s own charging stations, Ather Energy’s charging grid and Gogoro’s battery swapping stations. Hero Electric vehicle a subsidiary of Hero raised Rs 220 crore from Gulf Islamic Investments (GII) along with participation from existing investor OAKS. Hero Electric Vehicles will invest Rs 700 crore by 2025 to rev up its business expansion, including setting up of a new manufacturing unit with an annual capacity of 10 lakh units. The company is also planning to increase production at its current plant at Ludhiana to 3 lakh units per annum from 75,000 units at present, as company targets to sell around 10 lakh units a year .

4. Greaves cotton

Greaves Cotton got into the electric vehicles segment by acquiring the Coimbator based Ampere Vehicles and the Noida based electric rickshaw (EV 3 wheeler) maker Bestway Agencies rolling out Ele brand vehicles. The company also bought a considerable stake in electric three-wheeler maker MLR Auto. Greaves Cotton Group has so far invested Rs 300 crore in its electric vehicle venture and generated revenue of Rs 60 crore per month from nil in the last three years. Greaves Cotton has signed an MoU with the Tamil Nadu government to invest about Rs.700 crores over the period of 10 years to set up a plant with an annual capacity With e-scooters, e-rickshaws, and e-autos, the company currently operates in 85 percent of the E-mobility sector.

5. Mahindra & Mahindra

Mahindra will invest Rs 3,000 crore on electric vehicle business in next 3 years. M&M also aims to put 5 lakh electric vehicles on Indian roads by 2025 and has already invested Rs 1,700 crore in the EV business and another Rs 500 crore on a new research and development (R&D) centre. The company has already launched electric Ludix scooter in Europe which is made in India. M&M-owned Peugeot Motorcycles has also lined up a total of five EV launches over three years. M&M is also working on building its first all-electric motorcycle under the legendary British brand BSA.

6. Kinetic Engineering ltd.

Kinetic Green a subsidiary of Kinetic Engineering limited is one the pioneering companies in the area of electric mobility with diversified product portfolio in ev 2-wheeler and 3-wheeler segment. The company has a large manufacturing facility in Ahmednagar with a capacity for adopting battery swapping technology so that swapping can take place at BPCL stations. The company recently launched its first electric three-wheeler with the advanced lithium-ion battery. Kinetic Green Energy is also planning to set up electric two-wheeler/ three-wheeler plants, advanced technology battery manufacturing and battery swapping stations in Andhra Pradesh, with an estimated investment of Rs 1,750 crore. The company also plans to invest Rs 300 crores in development of an EV 2 & 3 wheeler as well as golf cars model in Mahrashtra.

Figure 4 : EV 2&3 wheeler past sales report and future prediction

Considering, the future of Ev mobility in 2 and 3 wheelers segments, investments and development made by the companies and predicted growth in upcoming years, investors can invest in above mentioned stocks for mid – term to long term period to get Electrifying returns in future.

-Het Zaveri

Info@smartinvestment.in

(Disclosures: At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.

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