Electric Vehicle Charging Station Business in India: Complete Guide 101

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Introduction

In recent years, especially after 2020, the EV market has exponentially increased. Whether it is sales or EV infrastructure, there has been high growth. The Government of India has taken the initiative of helping the EV industry boom through multiple subsidies. This also means that a business like an electric vehicle charging station has the potential to grow and become highly profitable.

Follow this guide to learn about starting your electric vehicle charging station business today.

The Expanding EV Market in India

The Indian EV market is a promising sector of the Indian economy. According to a report by PR Newswire, the EV market in India is expected to touch USD 152.21 billion by 2030. The report states that the EV industry is set to grow at a CAGR of 94.4% between 2021 to 2030. The government is placing high emphasis on electric vehicles due to climate change concerns.

The government has injected USD 1.4 billion in the form of the FAME scheme. That will allow the faster adoption of EV infrastructures and vehicles while driving down costs at the same time. The government also provides tax benefits to EV owners, thereby, helping the market to swell even further. As India experiences rapid growth in the EV industry, the demand for EV infrastructure is at its peak.

Private players such as OLA, Hyundai, and TATA have already begun building EV ecosystems.

Benefits of Setting up EV Charging Stations

Electric vehicle charging stations have a lot to offer. Apart from the charging facility, they provide options for generating revenue in multiple ways. Firstly, due to the boost provided by the government, setting up private EV charging stations is much easier than before. EV stations can be incorporated in tech parks, office complexes, residential layouts, and inter-city highways.

Here are some of the benefits of setting up EV charging stations:

  • Long-term customers: By creating a seamless customer experience, EV stations can retain customers. If you position charging stations in equal intervals, it increases connectivity and brings in more users. Additionally, by partnering with EV companies, you can offer third-party charging solutions and draw in their customers as well.
  • Multiple Revenue Streams: Charging stations usually offer a pay-per-charge model or a subscription-based model. Apart from the electric chargers, your EV station can earn revenue by placing advertisements, parking fees, and renting out space for food shops.
  • Operation Costs and Environmental Benefits: Compared to the cost of combustion fuels, sourcing and supplying electricity is much cheaper. This saves on operation costs and has positive environmental implications. You can further reduce costs by investing in renewable electricity sources such as solar and wind power.

Another added advantage of an EV charging station is that you can future-proof your business. EV adoption is guaranteed to grow. Thus, with each year, the number of customers will also increase.

Types of EV chargers

There are primarily two types of EV chargers: AC and DC chargers. Alternating Current (AC) chargers are the slowest ones that charge an EV in 6 – 8 hours. These chargers are often used in homes. Direct Current (DC) chargers are the fastest chargers that charge an EV in less than an hour. These are found in charging stations.

Globally, there are three types of charging stations available (based on the voltage):

  • Level One: Level one chargers are AC chargers that use a standard 120V AC plug. They are inexpensive, easy to set up, and can be directly plugged into a wall socket. These can be used to charge cars overnight.
  • Level Two: The second level chargers are also AC chargers but use a higher voltage plug of 240V. Only a trained electrician can install these chargers. These chargers can charge an EV within two hours.
  • Level Three: Level three or DC chargers are the fastest chargers available. They are also the most expensive to set up. They can charge a vehicle up to 80% in just 20 minutes. However, they require highly-specialized equipment and most cars do not support DC charging.

Companies that manufacture the three levels of EV chargers are – Alphaa EV, Charzer, Kazam, ABB, Mass Tech, and Delta.

Create a Business Plan for Electrical Vehicle Charging Station

Establishing EV charging stations requires fundamental knowledge of the EV ecosystem and market. Considering the nascent stage of the EV industry in India, you can start a profitable charging business with proper planning. A business plan will help you map out every step of this process. Use this standard business plan template for reference.

Below are some of the important aspects you need to focus on.

Executive Summary

An executive summary is the first two pages of your business plan. It comprises a summary of your proposal. A well-written executive summary can instantly attract the investor and help you secure funding. Your job is to pitch your business in a way that delivers three key points:

  • About the company and its mission
  • Industry insights and how you plan to succeed
  • Goals

Try to keep your executive summary as short as possible.

The language should be clear, concise, and cite credible sources for all your statistics. If you’ve done your financial planning right, you can even drop in some projections for added effect.

What Types of Chargers Will You Offer?

As mentioned above, three types of chargers are available. However, while deciding what chargers you also need to consider your target audience. If your primary customers are going to be electric bike users, level three chargers wouldn’t work. In most EVs sold in India, only level two charging is supported.

However, if you want to cater to the luxury EV segment such as MG ZS EV or Mercedes, then a level three charger makes sense. Teslas support level three charging.

However, TESLAS is yet to launch in India.

You can also have a combination of level two and three chargers based on your customer segmentation. Remember, level three chargers can be quite expensive to set up compared to level two.

Infrastructural Requirements for Setting EV Charging Station

The infrastructural requirements of EV charging stations are based on the type of chargers, and location.

For example, if you want to set up charging stations in office complexes and residential layouts, you likely will not have a lot of space for placing adverts or food stalls. Therefore, for such a setup the infrastructural requirements are level one and two chargers, and 5 charging spaces.

Additionally, you can also add a few vending machines instead of food shops. The following technical infrastructure is needed for every EV station:

  • Transformer, substation equipment, and safety equipment
  • Electrical cables and meters
  • Civil works
  • Land space
  • Globally-approved chargers

However, for charging stations in the city and highways, you get more freedom. You can rent out a large parking complex with enough space to charge over 20 vehicles at once.

Such stations also give you the flexibility to place large banners, and screens and rent out small shops to food joints.

Cost of Setting Up EV Charging Stations

However, the cost of setting up one charging station is quite high. Therefore, you would need an enormous amount of capital for setting up multiple stations. However, the government allows setting up charging stations without any licenses.

Ideally, you can begin with one electric charging station and as your business does well, you can expand the network. Below is a cost breakdown as per Lendingkart:

Infrastructure cost (annual cost): approximately INR 20 lakhs – land lease for 12 months (INR 50,000/month), electrical equipment, civil works, maintenance, and marketing.

Charger Cost (One-time investment): Level one chargers are the cheapest to install at INR 65,000 per charger. Whereas, a level two charger costs around INR 1.2 lakhs. For setting up at least 10 level two chargers, you will incur a cost of INR 12 lakhs.

Management

EV charging stations do not require a lot of manpower to manage. Customers can park their cars next to a charging point, plugin, and wait till the charging completes. Payment is done in the charging console.

However, you will need:

  • Two-three administrative staff to oversee the station
  • A professional electrician at the ready for timely maintenance
  • Security for managing the flow of traffic and parking cars

Competitor Analysis

Studying your competitors in the EV industry is extremely important. Despite the industry being in the development phase, several companies offer charging solutions such as – Delta Electronics, Mass Tech, ABB, Exicom, TATA, etc.

However, they also offer level three charging for industrial vehicles. Thus, by analysing their marketing strategies, station locations, and infrastructure, you can get an idea of how they generate profits.

Through competitor analysis, you can create your pricing model and employ unique strategies that your competitors have missed out on. You can also pick the best spot for your station based on the location of your competitors.

Pick an Ideal Location

Just like petrol bunks, EV charging stations need to be placed at predefined intervals.

The Government of India has stated that EV charging stations must be set up at intervals of 3 km within the city, 25 km on highways, and 100 km for heavy-duty vehicles such as buses. Within the city, you must pick spots that see a high influx of traffic. Ideal locations for EV charging stations would be:

  • Intersections
  • Tech parks
  • Colleges
  • Office Complex
  • Residential Complex
  • Malls

EV Charging Station Franchise in India

Setting up charging stations is an expensive venture if done from scratch. However, it does generate high profits in the long term. Therefore, established franchises are a lucrative option in this sector. You can skip the costs of marketing, brand promotion, and hefty installation.

A franchise offers access to a large network of stations and top-notch technical maintenance. Some of the most popular franchises to consider are:

  • Tata Power
  • Ather
  • OLA
  • Exicom
  • EVQ Point
  • PlugNGo
  • P2 Power Solutions

Conclusion

Electric vehicle charging stations are the backbone of the EV industry. They form an essential building block of the entire EV ecosystem in India. While a charging station is an expensive investment, it has a high ROI which will only increase with time.

To put into perspective, imagine if you set up petrol bunks across the city five to ten years before petrol cars became mainstream. It would eventually pay off quite well. It’s the same case with EV stations. As the Indian EV market booms, the charging infrastructure will play the most important role.

Electric Vehicle Charging Station doesn’t buzz like the right business for you. Worry not my friend as there are a variety of car business ideas for you to choose from.

This post is also available in: English

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