Not just EV makers, there are many more stocks that can gain from EV play

• Olectra Greentech, Tata Power, Motherson Sumi are among EV company stocks that have doubled nearly or more than doubled investors' money in over a year.
• Sales penetration of electric two wheelers (E2W) is expected to increase by close to 78% by 2030, on the back of government policies, technology, infrastructure and consumer acceptance, says a report.
• Analysts believe Ather Energy (Hero), Hero Electric, Ampere (Greaves Cotton), TVS, Ola Electric and Bajaj Auto will be the front runners to thrive in the EV gold rush.

As India takes the greener path, the electric vehicle (EV) ecosystem is all set to grow at a pace of 52% CAGR, according to a report by Equitymaster.

The sector is expecting growth across all categories of EVs but two- and three-wheelers, which constitute the bulk of auto volumes, might be the bigger opportunity.

It’s already evident in the sales too.

“For three-wheelers, the volume sales have been at 11 lakh units (exports included), of which electric rickshaws average 1 lakh. In the next three to five years, this could be a 9 to 10 times growth opportunity,” said a report by Equitymaster.

A report by Redseer Strategy Consultants predicts that electric two wheeler (E2W) sales will increase by close to 78% by 2030, on the back of government policies, technology, infrastructure and consumer acceptance.

This means a bonanza awaits retail investors in the ecosystem too. Apart from the usual suspects like Tata Motors and Hero, stock markets are also rewarding battery and component makers.

Analysts believe Ather Energy (Hero), Hero Electric, Ampere (Greaves Cotton), TVS, Ola Electric and Bajaj Auto will be the front runners to thrive in the EV gold rush. But like in the California gold rush where suppliers of picks and shovels made even more money than those who struck gold, the component suppliers and allied companies are set to thrive.

Auto component supplier Motherson Sumi, bus manufacturer Olectra Greentech, and Tata Power – which is working to lay charging stations, are among EV stocks that have doubled or more than doubled investors' money in over a year.

“EV industries have shown great output in the stock market in the last one year,” said Manoj Dalmia, founder and director at Proficient Equities. He said that several battery makers, auto component manufacturers and allied companies would benefit from the surge in EVs.

EV players recommended by analysts

The allied advantage
Automotive lighting solutions company Lumax Industries, extrusion company Kabra Extrusiontechnik, government-owned Bharat Electronics, and Bharat Forge are EV-themed stocks recommended by Equitymaster, all of which, it believes can gain from rapid growth in the industry.

Bharat Forge has also recently formed a new company named Kalyani Powertrain for its EV business initiatives.

However the very new ecosystem that’s being built needs a lot more innovation to address its many pain points.

“Long charging time and poor charging infrastructure are the two main pain points for both users and non users,” said Mukesh Kumar, engagement manager at Redseer Strategy Consultants.

Tata Power is setting up charging stations at HPCL’s retail outlets, and Exide Industries provides lithium-ion batteries and energy storage solutions. As the ecosystem expands, many companies like battery makers, charging stations, and auto part companies too can grow at the same pace as EVs.

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