Venturing into the establishment of a company offering electric vehicle (EV) charging stations in India signifies a commendable step towards embracing social responsibility and tapping into a promising business avenue.
Do you wish to launch a company providing charging stations for electric vehicles in India? Then, congratulate yourself for taking the first step towards social responsibility. Opening an EV charging point is a potentially lucrative business opportunity, given the widespread support for green transportation initiatives worldwide. This article discusses the business strategies for EV charging stations in India.
Dimensions of the EV Charging Station Industry
The EV charging infrastructure, akin to traditional gasoline pumps, facilitates the recharging of electric vehicles (EVs) at electrical facilities. This sector is witnessing a surging demand for charging points, a trend expected to intensify as more vehicles transition to electric power. Anticipated government initiatives further amplify the need for electric charging stations.
Government Initiatives
The Indian government is actively endorsing environmentally friendly transportation, signalling a significant impact on the automotive sector. Forecasts by experts predict abundant opportunities in the future for the electric two- and three-wheeler segments, with an expected surge of 70–80% in adoption by 2030.
Morover, recent EV regulations established by State and Central governments have paved the way for potential entrepreneurs to explore opportunities to launch EV charging stations in India, provided they meet the requisite criteria.
Types of EV Chargers
EV chargers can be categorized based on the type of current they employ. Direct Current (DC) chargers offer rapid charging options, whereas Alternating Current (AC) chargers typically provide slower charging rates compared to their DC counterparts.
Different charging protocols, such as CCS, CHAdeMO, and GB/T, further classify these chargers. While GB/T is of Chinese origin, CHAdeMO hails from Japan, and CCS has European roots. The choice of charging technology depends on consumer demand, with the CCS protocol predominantly used for EVs in India.
Here is a rundown on the two most fundamental types of EV chargers:
-
Fast Chargers
Strategically located along major routes across the country, EV fast chargers deliver high-power DC to swiftly recharge vehicles equipped with large battery capacities and quick charging capabilities. The power output of these machines typically ranges from 15 kW to 150 kW, although the vehicle’s ability to accept energy also influences the speed of the charging process.
-
Slow Chargers
AC chargers facilitate the gradual charging of EVs, suitable for installation in residential complexes due to their lower power consumption. Although slower in comparison, taking approximately 6 to 14 hours, these chargers offer cost-effectiveness and simplicity. Two- and three-wheeled electric vehicles commonly utilize these chargers.
Prerequisites for Starting an EV Charging Station Business Plan
- At most, there should be one charging station within three kilometres of each grid
- Every 25 kilometres, there should be a charging station on every side of the road.
- For heavy and long-range EVs, fast charging facilities should be available across both sides of the road.
- Bus terminals and Transportation Nagars in cities must house charging outlets.
Buses and other heavy-duty electric vehicles need a large charging facility that meets the following requirements:
- Installing two 100-kilowatt (CSS and CHAdeMO) chargers is necessary.
- A fast-charging station with the proper liquid-cooled cables for fluid-cooled batteries.
- To meet the specifications of the charging station, FCS (Fast Charging Stations) will need to include battery change capabilities for larger electric vehicles.
Benefits of Starting an EV Charging Station Business Plan in India
Benefits of Launching an EV Charging Station Business in India:
-
Tax Exemption Incentives
Finance Minister Nirmala Sitharaman, in the 2019–20 budget, introduced an additional tax exemption of ₹1.5 lakh on interest paid for the acquisition of electric vehicles, providing financial incentives for both businesses and consumers.
-
Government Support for Electrification
The government actively supports the adoption of electric vehicles by announcing incentives for integrating electric hybrid systems or electric kits into autos. Certification processes for electric vehicles are streamlined, contributing to the promotion of clean and sustainable transportation.
-
Environmental Impact and Economic Benefits
Electrification aids in reducing automobile emissions, a major contributor to air pollution, and addresses economic concerns. The reduction in emissions positively impacts the economy, saving an estimated 3% of GDP annually.
-
FAME and NEMMP Programs
The government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) and National Electric Mobility Mission Plan (NEMMP) 2020 initiatives aim to convert a significant portion of the automotive industry to all-electric by 2030, presenting a strategic opportunity for EV charging station businesses.
-
High Growth Potential
The Indian electric vehicle market is poised for substantial growth, with a projected Compound Annual Growth Rate (CAGR) exceeding 37% between FY2018 and FY2023. This growth signifies a lucrative market for businesses involved in the electric vehicle ecosystem.
-
Contributing to GDP
The electric vehicle sector is anticipated to contribute significantly to India’s GDP, with projections suggesting that a fifth of the country’s GDP will be derived from the production of electric vehicles and related components by 2022.
-
Government Mandates for Charging Stations:
To bolster the electric vehicle infrastructure, the Indian government mandates the installation of EV charging stations at regular intervals. This includes requirements for urban areas (every three kilometres), highways (every 25 kilometres), and longer highways catering to heavy-duty vehicles (every 100 kilometres).
Launching an EV charging station business in India not only aligns with the nation’s push towards sustainable transportation but also positions entrepreneurs to benefit from favourable government policies and a rapidly growing market.
Starting an EV Business: Market Research and Business Planning
Launching an EV charging station in India requires meticulous market research and strategic business planning. To ensure a successful venture, consider the following key areas:
-
Diversification of Electric Vehicles
- Choose the range and types of electric vehicles (EVs) you intend to cater to. Explore opportunities beyond conventional cars, such as electric buses, autos, and e-trucks. Additionally, focus on niche segments like e-rickshaws, three-wheelers, and electric scooters to diversify your customer base.
-
Specialized Charging Services
- Identify specific electric vehicle categories that align with market demand. Offering specialized charging services for e-rickshaws and vintage Bajaj 3 Wheelers can set your charging station apart. This niche approach allows you to tailor your services to unique customer needs.
-
Rapid Charging Methods
- Choose the type of rapid charging method you want to provide. Understanding different charging technologies, including Japanese and European options, enhances your ability to cater to a diverse range of electric vehicles. This knowledge is crucial for offering efficient and compatible charging solutions.
-
Comprehensive Knowledge of EVs
- Before constructing the EV charging station, acquire in-depth knowledge about electric vehicles, their specifications, and charging requirements. Stay informed about the latest advancements in EV technology to provide cutting-edge and reliable charging services.
-
Adaptability to Market Trends
- Stay abreast of market trends and consumer preferences in the electric vehicle sector. The industry is dynamic, and adapting to evolving trends ensures that your charging station remains relevant and meets the changing needs of electric vehicle users.
-
Collaboration and Partnerships
- Explore potential collaborations with electric vehicle manufacturers and industry stakeholders. Building partnerships can lead to mutually beneficial arrangements, providing access to the latest EV models and technologies for your charging station.
-
Regulatory Compliance
- Understand and comply with regulatory requirements for EV charging stations. Stay informed about government policies, incentives, and regulations that may impact the electric vehicle charging industry. Compliance ensures a smooth and legal operation.
How to Start an EV Business: Necessary Licences and Registrations
-
Company Formation
In India, you need to register your business or create a company before you can legally launch any enterprise. The following are the many company models that you may use to launch an EV charging station business plan:
- Registration of a Private Limited Company or LLP
- Registration of a Single-Person Company
- Registration of a public limited company
- Registration of a private limited company
-
GST Registration
According to GST, charging an EV via a PCS is considered a service. Hence the process will be subject to an 18% tax. As a result, you must get GST Registration and file GST returns to launch your EV charging station business plan in India.
-
ISO Certification and Trademark Registration
Today, every industry faces intense competition. EV Charging Station companies are in the same boat. You must therefore apply for ISO Certification and Online Trademark Registration if you want to be competitive, offer top-notch goods and services and protect your business.
Conclusion
The potential and benefits of starting an EV charging station business in India are enormous. To succeed, though, there are a few measures that you must take. To start your business successfully and reach your objectives, consult with our best legal service staff at Vakilsearch.
