Top EV Stocks in India Set to Benefit from PM E-DRIVE Scheme
On September 11, 2024, Prime Minister Narendra Modi’s Union Cabinet approved a significant initiative – the ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme.’ With a budget of ₹109 billion allocated over two years, the scheme marks a pivotal moment in India’s push towards electric vehicles (EVs).
This comprehensive plan seeks to accelerate the country’s transition to sustainable mobility through financial incentives, public transportation electrification, and infrastructure development. Here in this content, we have explored the top 5 EV stocks in India that are going to benefit from the PM E-Drive Scheme.
Key Elements of the PM E-DRIVE Scheme
The PM E-DRIVE Scheme is designed to promote the widespread adoption of electric vehicles across various segments of the automotive market, ranging from two-wheelers to public transportation. Here are the primary components of the initiative:
Demand Incentives: ₹36.8 billion has been allocated as demand incentives for electric two-wheelers, three-wheelers, trucks, ambulances, and other emerging EV technologies. These incentives are designed to reduce the upfront cost of EVs for consumers, making them a more attractive alternative to conventional vehicles.
Public Transport Electrification: A notable ₹43.9 billion will be directed towards state transport undertakings and public transport agencies. The funds will support the procurement of 14,028 electric buses, contributing to the electrification of India’s public transportation infrastructure. This is a crucial step towards reducing pollution and promoting sustainable urban mobility.
Charging Infrastructure Development: To address range anxiety, which is a significant concern for EV adoption, the government has allocated ₹20 billion to install public EV charging stations. These stations will be strategically placed in high EV penetration cities and along major highways, enabling a smoother transition for EV drivers.
The launch of the PM E-DRIVE scheme had an immediate impact on the stock market, with shares of electric vehicle-related companies surging on September 12, 2024. Investors welcomed the government’s strong commitment to advancing the electric vehicle ecosystem, which is poised to place India at the forefront of the global EV revolution.
Investors have already taken note of the government’s strong push toward a greener future. On September 12, 2024, the stock market saw a surge in EV-related companies as confidence grew in the new policy. Below are the top five EV stocks poised to benefit from the PM E-DRIVE Scheme.
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Tata Motors (NSE: TATAMOTORS)
Current Market Position: Tata Motors, a major player in the Indian EV space, holds approximately 70% of the market share. Its electric vehicle division, Tata Passenger Electric Mobility (TPEML), has driven the company’s growth, with popular models like the Nexon EV and Tigor EV gaining significant traction. Tata Motors has successfully positioned itself as a leader in the shift to electric mobility in India.
Stock Market Outlook: Since the approval of the PM E-DRIVE scheme, Tata Motors’ stock has seen a steady rise. The company’s dominance in the EV market, coupled with the government’s incentives for EV adoption, positions it for further stock appreciation. Analysts expect that with increased demand for electric vehicles and expansion of public charging infrastructure, Tata Motors could continue to outperform.
Investment Prospects: The company’s ongoing investment in lithium-ion battery production and its plans to transition into an EV-centric business by 2030 have garnered attention from long-term investors. The stock is considered a strong buy for those looking to capitalize on India’s electric vehicle growth story.
Olectra Greentech (NSE: OLECTRA)
Current Market Position: Olectra Greentech is a key player in the electric bus manufacturing sector, with over eight years of experience. The company has secured large orders for electric buses, including 5,150 units from Maharashtra State Road Transport Corporation (MSRTC) and 3,000 units from Brihanmumbai Electric Supply and Transport (BEST).
Stock Market Outlook: Olectra Greentech’s shares surged following the PM E-DRIVE scheme announcement. The government’s push for public transportation electrification through the procurement of over 14,000 electric buses plays directly into Olectra’s business model. The company’s expanding manufacturing capacity further solidifies its growth potential, making it a promising stock in the EV sector.
Investment Prospects: As the government provides incentives for electric buses, Olectra is set to benefit significantly. Investors are increasingly bullish on the company’s prospects, especially with its plans to ramp up production and meet growing demand. Olectra Greentech is a stock to watch for those interested in EV infrastructure and public transport electrification.
Ashok Leyland (NSE: ASHOKLEY)
Current Market Position: Ashok Leyland is the second-largest manufacturer of commercial vehicles in India, with a growing presence in the electric bus and truck market. The company is actively working to electrify its vehicle portfolio, with notable contracts for electric buses in Delhi and Bangalore.
Stock Market Outlook: Following the PM E-DRIVE scheme, Ashok Leyland’s stock saw increased interest from investors. The company’s ongoing delivery of electric buses and trucks aligns well with the government’s focus on public transport electrification. The government incentives for commercial EVs make Ashok Leyland a stock with strong growth potential.
Investment Prospects: With the company’s expansion into electric trucks and its existing contracts for electric buses, Ashok Leyland is well-positioned to capture a larger share of the EV market. Its diversified presence across both commercial and electric vehicles makes it a solid long-term investment as the PM E-DRIVE scheme fuels demand for commercial EVs.
Bajaj Auto (NSE: BAJAJ-AUTO)
Current Market Position: Bajaj Auto has made significant inroads into the electric two-wheeler segment, with its flagship model, the Bajaj Chetak. The company reported robust sales of over 40,000 units in the most recent quarter, signaling strong demand in the EV space. Bajaj’s partnership with Yulu, a shared electric mobility startup, further strengthens its foothold in the urban electric mobility market.
Stock Market Outlook: Bajaj Auto’s stock has seen a notable uptick, supported by strong sales of the Chetak electric scooter and the government’s incentives for electric two-wheelers under the PM E-DRIVE scheme. As demand for electric two-wheelers grows, Bajaj Auto is expected to be one of the biggest beneficiaries of the government’s push toward EV adoption.
Investment Prospects: With its expanding distribution network and increased production capacity, Bajaj Auto is well-poised to capture more market share in the electric two-wheeler space. The company’s stock is favored by investors looking for exposure to the rapidly growing electric scooter market in India. The focus on EV infrastructure development will further support Bajaj Auto’s growth trajectory.
JBM Auto (NSE: JBMA)
Current Market Position: JBM Auto is a diversified player in the electric vehicle market, with interests in auto components, electric buses, and EV charging infrastructure. The company recently secured a significant order for 1,390 electric buses and is rapidly expanding its EV production capabilities.
Stock Market Outlook: JBM Auto’s stock has gained momentum as the company continues to secure large contracts in the electric bus segment. The PM E-DRIVE scheme’s focus on public transport electrification places JBM Auto in an excellent position to benefit from increased government spending on electric buses and EV infrastructure.
Investment Prospects: With a strong order book and increasing production capacity, JBM Auto is positioned for long-term growth in the electric bus market. Investors are optimistic about the company’s ability to capitalize on the government’s push for EV adoption, making JBM Auto an attractive stock for those focused on the public transportation and infrastructure sectors.
The PM E-DRIVE scheme represents a pivotal moment in India’s transition to electric vehicles, and the stock market is responding positively to the initiative. Companies like Tata Motors, Olectra Greentech, Ashok Leyland, Bajaj Auto, and JBM Auto are well-positioned to capitalize on the government’s focus on EV incentives and infrastructure development.
For investors, the EV market offers immense growth potential. However, it’s essential to approach these stocks with caution, as many have already experienced significant price increases. Long-term investors who align their portfolios with the EV revolution, especially in India, stand to benefit as the sector matures and demand for electric vehicles continues to rise.