Best Electric Vehicle stocks in India

In this article we will discuss the best electric vehicle stocks in India. In the automobile industry in India, this decade will be known as the transition phase of the automobile industry. Vehicles are transforming into electric vehicles. This transition is recognized by a few big players in the automobile industry, so these groups are competing to manufacture electric vehicles. On a global level, Tesla is manufacturing world-class electric vehicles, but in India, it’s too late to take advantage, so this advantage is taken by Indian automobile players like Tata Motors. Mahindra, Mahindra, and Eicher Motors.

80% of crude oil in India comes through imports. So for a developing country, it is important for us to reduce our dependency on crude oil. The Indian government has started an initiative to promote electric vehicles so that carbon emissions can be reduced. The Indian government has decided to become a country with net zero carbon emissions by 2070.

Fossil fuel is a big source of pollution, so due to global warming, most developed countries are reducing their fossil fuel consumption capacity to reduce carbon emissions. Fossil fuel is a limited source of energy, while electric energy is a very big and never-ending source.

Indian Automotive Industry

In India, Nifty has given 5% growth, while the automobile sector has given 20% growth. India is in the 4^th position in the global automobile industry, which is a significant achievement for India.

• India is in the first position in the tractor manufacturing segment.

• In bus manufacturing, India is in second place.

• In heavy truck manufacturing, India is in 3^rd place.

Electric vehicles are the future of the automobile sector, and India is growing in the electric vehicle segment with a 36% CAGR, while the 2-wheeler sector is growing by more than 436%, which is massive growth.

In the current scenario, if you want to purchase a vehicle, you have to wait for 2 to 3 months because the booking count is very high while supply is limited. A global chip shortage is also a factor.

Top EV manufacturing companies in India

Tata Motors

Tata Motors is in the top position in the electric vehicle market. Tata Motors is engaged in the manufacturing of commercial vehicles, passenger vehicles, electric vehicles, Jaguars, and Land Rovers. Jaguar and Land Rover are contributing 64.41% of Tata Motors revenue.

Tata Motors has the top position in the compact SUV segment with 31% market share. In the electric vehicle market, Tata Motors is a dominant player with almost 85% market share. High debt is a major concern for this company. The company is in debt to Jaguar and Land Rover to the tune of 57,000 crore.

Despite this, Tata Motors has given very good returns in the last 5 years. Promoters of this company are very bullish for the future of this company.

Mahindra and Mahindra

Mahindra & Mahindra is in the second position in the electric vehicle market. M & M is a well-diversified stockholder in the automobile industry. M&M manufactures tractors, cars, trucks, earthmovers, and passenger vehicles. In the last 20 years, M&M has given 27% returns, and last year it gave 57% returns. Mahindra’s XUV400 was the fastest-booked electric SUV in India. They booked 15,000 units in just three days. Mahindra has the fastest-booking SUV Scorpio-N with 1 lakh bookings in Indian automobile history. M & M is in the 2^nd position in the compact SUV segment with a 21% market share.

In 3-wheeler electric vehicles, M & M is a market leader with a 70% market share. The company has planned a 1,000 crore investment in the upcoming financial year.

Olectra Greentech Ltd.

Olectra Greentech is India’s largest electric bus manufacturer. Olectra is also working on setting up the charging station. The company has given muti-bagger returns after the 2020 pandemic. For four years, the company has been profitable. Olectra has plans to be a pioneer in public vehicles. The company has given good returns of more than 35% in the last 5 years. The company has low debt and an 8.11% ROE, which is also a good sign of future growth.

Olectra has received an order for 800 electric buses from the Maharashtra state government.

Eicher Motors

Eicher is a leading player in the 2-wheeler segment with the brand name Royal Enfield. Eicher Motors is engaged in the manufacturing of Royal Enfield and commercial vehicles. Eicher Motors manufactures the commercial vehicle for the Volvo Group. It’s a joint venture under the name of VE Commercial Vehicles Ltd. Eicher Motors has not performed well in the last 5 years, but the company has very good fundamentals.

The company has a low debt-to-equity ratio of 0.02 and a ROE of 21.12%, indicating that it will perform well in the future. The company has a flagship brand in the 2-wheeler segment.

Ashok Leyland

Ashok Leyland is a leading company in manufacturing trucks and buses, heavy engineering machines, and earthmovers. If you are on the road, you can notice that 4 out of 10 trucks are manufactured by Ashok Leyland. The company has been focusing on the electric vehicle segment in recent times.

Recently Ashok Leyland has signed a MoU with Uttar Pradesh government to set up an integrated commercial vehicle plant for manufacturing of electric buses. This will be 7th vehicle plant in country and 1st in Uttar Pradesh. The company has plan to invest 1000 Cr in this new facility over the next few years. The production capacity of new plant will be 2,500 buses per annum, which will further expand based on the market demand.

Ashok Leyland has given more than 20% returns in the last financial year. After 2020, the company was stuck in a debt crisis, and the next 2 financial years passed with losses, but in FY24, the company turned out to have a 1241 crore profit. The company has a high debt ratio of 3.64 and a ROE of 15.65%.

TVS Motors

TVS Motors is the third-largest 2-wheeler manufacturer in India. TVS Motors is focusing on the electric scooter segment and has launched various models of electric scooters. TVS X and TVS iQube are popular brands in the electric segment.

TVS Motors has given more than a 140% return in the last five years. The company is consistently making profits, but the major concern with this company is its debt, with a debt-to-equity ratio of 4.06.

Best Railway Stocks in India

Challenges for EV companies

Charging station

Charging is still a very major challenge for electric vehicles because, like a gasoline pump, there is no sufficient charging station. In the coming years, many companies will be investing heavily, like Indian Oil, Tata Power, and Adani Power.

Battery cost

In electric vehicle operation, battery costs are very high. Due to this, the cost of electric vehicles is increasing and becoming out of reach for middle-class people. Electric vehicles are just double the price of non-electric vehicles.

The Future of EV Stocks

The government is running an initiative to reduce net zero carbon emissions, and until 2070, the government will provide subsidies for the purchase of electric vehicles. Vehicles are the biggest source of pollution. In India, there is still much growth possible because 70% of the population still doesn’t have a car.

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Conclusion

As we discussed in this article, electric vehicles are the future of the automobile industry. The government of India is scaling up the EV sector by installing charging stations. The battery sector will also be booming in the EV market in the near future. As the growth rate of the EV market is 36%, now is a good time to make an investment in best Electric Vehicle stocks n India.

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Disclaimer: I am not a SEBI-registered investment adviser or research analyst. The information shared is only for educational purposes. This is not investment advice.

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