Electrifying Stocks
Part –3
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. We had already covered EV 2 wheeler and 3 wheelers in our cover story named Electrifying Stocks Part -2. Now, in this cover story we will discuss on 4 wheeler and passenger vehicles.
Electric 4 wheelers are of 4 types:
- Battery Electric Vehicle (BEV)
- Plug-in Hybrid electric vehicle (PHEV)
- Hybrid Electric vehicle (HEV)
- Fuel cell electric vehicle (FCEV)
Figure 1: Types of Ev 4 wheelers
Countries across world are promoting the use of Electric vehicles to reduce carbon footprints and overcome the Greenhouse effect. The sales of Electric vehicles have increased a lot in 2021 compared to previous years and will notice more uptrend in upcoming years.
Figure 2: Global Sales comparison of EV till 2020
Government of India along with the state governments are promoting EV by introducing PLI schemes as well as announcing subsidiaries in buying electric vehicle.
Figure 3: EV Sales comparison in of India
Figure 4: Ev sales breakout of states
Along with passenger vehicles, GOI is also boosting sales of Electric buses in order to reduce pollution and carbon footprints. Electric buses can be used at many places such as Public transport, school bus, Company bus etc. It has a huge market in future with great growth opportunities.
Figure 5 EV bus sales in India
Stocks related to EV 4 – wheelers and Ev bus are:
- Tata Motors
Tata Motors' electric vehicle subsidiary raised investment of $1 billion from TPG Rise Climate and Abu Dhabi’s ADQ. The company would also invest more than Rs 16,000 crore over next five years in EV business. Tata Motors is already the leader in the electric passenger vehicle segment with a share of more than 70%. The company has already delivered 60 electric buses to Ahmedabad Janmarg Limited (AJL) under the FAME II initiative by means of a Gross Cost Contract (GCC). Tata Motors is also planning to add 10 electric vehicles to its EV portfolio by 2026.
- Ashok Leyland
Ashok Leyland has invested around $136 million in Switch Mobility - a combined entity of Ashok Leyland's electric CV operations and the erstwhile Optare of the UK. The company’s board has also approved transfering of its electric vehicles (EV) business to its subsidiary Switch Mobility Automotive Ltd, India (SMAL) for Rs 240 crore on a slump sale basis. Switch Mobility will be launching its first electric light commercial vehicle (e-LCV) in India soon for which it had secured 2,000 orders. The group has plans to invest $150-200 million in the EV space in the next few years.
- SML ISUZU
SML ISUZU is one of the leading Truck and commercial vehicle manufacturer in India and will soon join the race of Electric mobility in India by launching its Electric vehicles along with other leading manufacturers.
- JBM Auto Ltd.
JBM Group, a home-grown auto component and commercial vehicle manufacturer recently formed a new company, JBM Ecolife Mobility Private Limited, to leverage its opportunities in the electric vehicles segment including e-buses and to expand ev charging infrastructure. The company bagged an order for supply, operation and maintenance of 200 electric buses from Delhi Transport Corporation (DTC). The company aims to invest Rs 500 crore in two years to strengthen the business and on charging and battery technology and aims to boost its capacity to produce 2,000 vehicles a year. The company recently secured orders for Electric Buses for Bengaluru Metropolitan Transport Corporation (BMTC), Jhansi Smart City, Uttar Pradesh and multiple corporate clients.
- Olectra limited
Olectra Greentech a subsidiary of Olectra limited will set up the country’s biggest electric bus factory with a capacity of 10,000 units on the outskirts of Hyderabad. The company has been allotted 150 acres of land in Telangana for setting up factory for electric vehicle manufacturing. The consortium of Olectra Greentech and Evey Trans (EVEY) has received an order for 100 electric buses from Telangana Government.
- Eicher Motors
Eicher Motors also has a presence in commercial vehicle space through VE Commercial Vehicles, which is a JV with the Volvo Group. The company has already delivered its Skyline Pro Electric buses in Kolkata and joined the league of zero-emission vehicle manufacturers.
- Maruti Suzuki
Maruti Suzuki India will launch electric vehicles in the country only after 2025 as the company feels that the demand for such vehicles at the moment is less and it would like to sell around 10,000 units a month whenever it enters the electric mobility space.
- Mahindra and Mahindra
Mahindra & Mahindra has announced its plans to invest about Rs 3,000 crores in the EV business by 2024. to launch 16 electric vehicles across the SUV and light commercial vehicle categories over the next six years. Company also invested Rs 400 crore in Karnataka and Rs 500 crore in Maharashtra over the next four-five years for Ev production and sales.
Considering, the future of Ev mobility in 4 wheelers and Electric bus segments, investments and development made by the companies along with extended support of GOI 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
(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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