India’s EV Charging Megatrend: Key Stocks and Challenges in Building Infrastructure

When it comes to the growing electric vehicle (EV) market in India, most discussions revolve around the automakers brands that are leading the production of electric cars, bikes, and buses. However, a critical component that is often overlooked is the development of charging infrastructure, which is essential to support the widespread adoption of EVs. In this context, certain companies within India's EV ecosystem are emerging as game-changers, with Servotech Power Systems being a prominent example.

Servotech Power Systems: A 10x Growth Story

Servotech Power Systems, a company that may not be well-known to the general public, has seen its stock price soar by 10 times in just two years. Initially a penny stock until 2022, Servotech's focus on building EV charging infrastructure has made it a significant player in India's EV ecosystem. The company's growth is not only driven by the increasing adoption of EVs but also by the government's ongoing efforts to promote renewable energy and EV-related initiatives.

While Servotech has garnered attention for its remarkable growth, it is not the only company making strides in the EV charging space. Several larger firms have entered the market, but the reality remains that India’s current EV charging infrastructure is still far from adequate to meet the growing demand over the next decade.

India’s EV Charging Infrastructure: The Road Ahead

India's EV charging infrastructure faces several challenges, which have been criticized by the international media. For instance, Nikkei Asia and the South China Morning Post have both pointed out that the lack of charging stations is slowing down the country’s electric vehicle revolution. With the current ratio standing at one charging station per 135 EVs far behind the global standard of one station per 6 to 20 EVs India's infrastructure is under serious pressure.

Recognizing these challenges, the Indian government has launched the PM E-DRIVE scheme, a comprehensive initiative designed to accelerate EV adoption, establish a robust charging network, and develop an EV manufacturing ecosystem. The scheme has a substantial budget of Rs 10.9 trillion and is expected to be implemented by March 2026.

As part of the government’s broader plans, electric vehicles are projected to make up 30% of new private vehicle registrations by 2030, amounting to 80 million EVs. To support this rapid growth, India will need nearly 4 million public and semi-public charging stations. However, the current infrastructure falls far short of this requirement, putting India at risk of being 40% behind its EV 30@30 target.

Global Comparisons: How India Stacks Up

Globally, major EV markets are significantly ahead of India when it comes to EV charging infrastructure. In the United Kingdom, for example, more than 90% of EV drivers have access to home chargers. In contrast, a 2023 study revealed that only 55% of Indian EV owners have access to similar facilities. China, which leads the global EV market, accounted for 70% of the world’s public EV charging network in 2023 and is expected to maintain a majority share through 2035.

Other countries are also making strides to improve their charging infrastructure. The UK aims to have at least 300,000 public chargers by 2030, while the United States government has committed US$ 50 million to expand its national network to 500,000 public charging ports by the same year. Japan has set its sights on deploying 150,000 charging points by 2030, including 30,000 fast chargers, to match the convenience of refueling conventional vehicles.

The Importance of Public Charging Infrastructure in India

For India, the development of public and workplace charging stations is crucial, particularly for those who do not have access to home charging. In addition to availability, the speed of charging will be an important factor for consumers, especially those who need to charge their vehicles during long journeys. Therefore, establishing a quick, reliable, and affordable public charging network will be key to boosting EV adoption.

Interoperability is another significant factor to consider. With multiple EV charging standards currently in place, ensuring that all chargers are compatible with a variety of EV models is essential to avoid confusion and frustration among consumers. The charging infrastructure also needs to be user-friendly, reliable, and transparently priced to encourage widespread use.

Corporate Investments and the Role of Major Players

While the government has introduced several initiatives to support the development of EV charging infrastructure—such as the FAME II program, which provides financial aid and targets the installation of charging stations every 25 kilometers along major highways—corporate investment has been relatively limited. However, there are some notable developments on this front:

• Maruti Suzuki, India’s largest automaker, recently announced plans to install 25,000 EV charging stations, leveraging its extensive network of service centers.

• Tata Motors has partnered with Delta Electronics India and Thunderplus Solutions to set up 250 fast charging stations across the country.

• Tata Power has already deployed over 850 charging points for EVs.

• Log 9 Materials, an EV charging startup in which Amara Raja Energy and Mobility holds a 12% stake, has partnered with Trinity Cleantech to establish 2,000 charging units across India.

• Hero Motors, BPCL, and Jio have also ventured into the EV charging space.

Despite these developments, the number of charging stations is still far below what is required to meet the growing demand.

The Challenges Ahead: High Costs, Low Returns

One of the biggest obstacles to expanding EV charging infrastructure is the high cost of setting up stations, particularly fast-charging ones. Investments are needed for land acquisition, equipment installation, and grid upgrades, all of which make it challenging for private players to scale their operations.

Additionally, integrating increased EV demand into the existing grid poses another challenge. Upgrading India’s grid to handle peak charging hours without compromising stability will require both careful planning and substantial financial resources.

Looking Forward: Opportunities for Investors

While large companies are slowly entering the EV charging space, smaller, more agile players like Servotech Power Systems may continue to thrive in the near future. However, this should not be taken as an investment recommendation. As with any stock, investors should carefully assess the fundamentals, valuations, and management quality before making decisions.

In the long run, companies in the power sector may have the most direct involvement in building out EV charging infrastructure, and power storage companies may also find this business stream viable as the market matures.

India’s EV charging megatrend presents an exciting opportunity for both companies and investors, but the road to a fully developed charging network will be filled with challenges. Addressing these obstacles will require a concerted effort from the government, corporations, and innovators alike.