Financial Viability of Electric Vehicle Charging Stations in India

07-11-2023 | 4 min read

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Financial Viability of Electric Vehicle Charging Stations in India

With the global automotive industry gravitating towards sustainable solutions, EVs are gaining impressive traction. In this context, India's ambitious electrification targets make robust charging infrastructure imperative. A thorough financial analysis reveals a promising landscape for EV charging businesses in India.

By 2030, there could be around 102 million EVs on Indian roads. To handle this, we'll need 2.9 million public charging stations across the country. This big plan can be a great opportunity for investors, but it requires an investment of ₹20,630 crores. Right now is a good time to consider investing in India's EV charging industry.

Wondering about the money you can make with an EV charging business in India? We have all the details you need! We've put together a thorough revenue forecast for EV charging businesses in India, highlighting the financial projection for Urzza's EV Charging partners.

The potential for profit is quite high now, especially with the Indian government's goal for 2030.

Profitable EV Charging Business in India with Urzza

EV Charger Types

Types of Electric Vehicle Charging Stations in India

  • Level 1 - Residential AC Charging
  • Level 2 - Convenient Slow Public Charging
  • Level 3 - Rapid DC Fast Charging

How do EV Charging stations make money?

The earnings and profitability of EV charging stations differ depending on the state and the amount of investment made. In India, these stations tend to be most profitable in cities and along highways where the use of EVs is high. The revenue primarily depends on the time it takes for charging; faster-charging results in more customers.

Predictions about profits and strategies to increase revenue are customized according to the specific type and services of the station. Charging to 80% capacity quickly, which takes approximately 40-60 minutes, presents an opportunity to engage customers and increase income. Adding a small eatery to the station not only boosts revenue but also offers a convenient space for customers during the charging process.

Financial Projection in an EV charging station in India is calculated based on two scenarios:

The yearly profit is calculated based on the following assumptions: Charging Station Setup Assumption:

  1. Setting up 60Kw Dual Gun DC Fast Charger with transformer
  2. Total one-time cost for setting up the charging station is ₹15,10,000/-

DC Fast Charger perfect for restaurants, food courts

Daily Traffic and Demand Assumption:

  1. Number of EV cars visiting the Charging Station per day is 10 in first year
  2. Number of incoming cars increases to 13 and 15 in 2nd and 3rd year
  3. Average Units consumed per Charging Session is 15 kW
  4. Daily units consumed by the Charging Station is 10 x 15 kW = 150 kW

EV Charging Station Setup Cost Estimation

Unit Economics:

  1. Expected revenue per unit of electricity supplied is ₹23
  2. DISCOM cost of electricity per unit is ₹7 (Electric Vehicles Charging Stations can avail subsidy across different states on unit Price)
  3. Gross profit generated annually per unit is 23-7= ₹16

Urzza EV Charging units consumed

Profit Estimation:

  1. Daily gross profit generated by charging 10 cars is 150 kWH x 16 = ₹2,400

Urzza EV Charging Business Revenue and Profit Estimation

Expense Assumption:

  1. Total Expenditure including location rent, annual maintenance etc. in 1st year is ₹2,90,000/-
  2. Monthly Rent increases by 10% annually
  3. Annual maintenance cost changes from ₹50,000 to 58,000 over three years

Yearly Profit Projection of an EV Charging Station

Profit from an EV Charging Station

Reach Breakeven point in less than 2 years

Projected ROI of an Electric Vehicle Charging Station

The return on investment (ROI) in the EV charging station business in India is influenced by factors like the rates charged for EV charging, the number of charging ports available, charging capacity, and the proximity of other charging stations.

The ROI in an Indian EV charging station business largely hinges on the type of infrastructure. If someone is installing an EV charger near a restaurant, coffee shop, food court, or mall, the EV charging business is likely to yield a higher ROI compared to a standalone EV charger due to the additional facilities near the charging station.

In the initial year, Urzza's partners stand to generate a net profit of ₹5,74,000, even under challenging conditions. This figure escalates significantly, reaching 9 lakhs starting from the second year.

EV charging proves to be a highly profitable venture in both the present and the future. Success involves patience and early entry into the sector, capitalizing on its potential until larger opportunities surface in the realm of EV charging business.

Disclaimer: Electricity tariff and subsidy rates vary between states, and the example used here pertains to Andhra Pradesh. This information is subject to change and should be verified with up-to-date sources for accuracy.

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