Investors have been looking for various sectors to diversify and book exceptional returns. With G20 and other world conferences focusing on reducing carbon footprint and promoting green energy, the world has started to talk about sectors like wind, hydro energy and EVs.
Pollution via transport has been a concern since decades. From the limited availability of fossil fuels to increase carbon emissions, alternative way to run vehicles has been a top priority. We have seen a jump from using petrol to use of CNG and ethanol blend to reduce carbon in the air.
EV and 2024
As we stand at the dawn of 2024, we can feel the gushing winds of EV and how it will dominate financial portfolios this year.
From the IPO of Ola Electrical to Mission 2030, everyone is eyeing development and growth in this sector. With ambitious government targets, falling battery costs, and a growing awareness of climate change, 2024 is the year the EV takes center stage.
Figures: In 2022, around 48,000 electric cars were sold in India, a number that has nearly doubled to over 90,000 units in 2023 due to strong demand and growing acceptance. EV sales in India grew by nearly 47% to 1.5 million in 2023. Not just this, Tata Motors Forecasts 40% Growth in EV Industry in 2024.
What’s brewing for EV?
Government Support: The government is ramping up its support for EVs. The government has set an ambitious target of having 30% of all vehicle sales be electric by 2030. This translates to substantial subsidies and tax breaks for EV manufacturers and buyers and a massive shift from the current 3% market share, requiring significant growth in the coming years.
EV Players: BluSmart, Tata, and MG Motors are all set to tap into this market and bring tremendous growth. The recent dealing between MG and Sajjan Jindal from the JSW group will amplify India’s growth trajectory, thus booming growth in this sector.
Growth in charging stations: India plans to set up 17,000 fast-charging stations by 2024, addressing the critical issue of range and making EVs more viable options for long-distance travel.
Ola Electric IPO: Ola Electric, India's leading electric vehicle (EV) manufacturer, is gearing up for a highly anticipated initial public offering (IPO) in 2024. This IPO could be a game-changer for the Indian EV market, attracting significant investment and propelling Ola Electric to even greater heights. Ola Electric aims for a valuation of around $7-$8 billion, making it one of the largest IPOs in Indian history.
What's in the Union Budget for EV?
As the EV revolution gathers pace, all eyes are now on the upcoming Union Budget in February 2024. The budget could consider further tax breaks for EV manufacturers, buyers, and investors. This could include reduced GST rates on lithium-ion batteries, income tax deductions for EV purchases, and unique tax benefits for companies investing in EV technology and infrastructure.
The government has allocated $1 billion to the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) scheme. This scheme has significantly incentivized EV adoption through demand and supply-side subsidies. With the current phase ending in March 2024, its extension with increased budget allocation is highly anticipated. This will support both EV manufacturers and buyers, keeping the momentum going.
In addition to the companies mentioned above, there are many other players in the EV space, both large and small. Newer products and higher discounts have lowered average EV prices, even before potential tax incentives. It will be interesting to see which companies emerge as the leaders in this rapidly evolving market.
What’s for you in this?
As an investor, many things can help you tap into financial freedom and accelerate growth via investment in EVs. Increased focus on EVs will draw significant investments into battery manufacturing, renewables, and charging infrastructure, benefiting investors and companies.
One of the most important things to watch in 2024 will be the development of battery technology. If there are significant breakthroughs in battery range or charging speed, it could further accelerate the adoption of EVs. The EV revolution is not just about cars. Electric trucks, buses, and even motorcycles are starting to market. This could have a significant impact on the transportation industry, as well as on the environment.