Helping You Build Wealth With Honest Research
Since 1996. Try Now


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Aug 25, 2021 - How Tata Power is Riding the EV Opportunity Without Making Any Cars

How Tata Power is Riding the EV Opportunity Without Making Any Cars

Aug 25, 2021

The electric vehicle (EV) race is on and Indian companies involved in this space are making technological changes.

Now, as the Indian EV industry gains widespread attention, its main focus is primarily improving on two fronts.

First, by increasing the number of vehicles.

At present, there are not many EVs available. Major mainstream offerings include the popular Tata Nexon EV, MG ZS EV, and the Hyundai Kona electric.

In the coming years, there will be many companies which will foray into this space and increase the types of EVs.

Second, by enhancing the charging infrastructure.

Like lithium-ion batteries which are the heart of electric vehicles, charging points are the next important thing.

EV manufacturing companies are spending tonnes of capital and energy on charging station infrastructure.

As per a report, by the year 2027, the business of EV charging stations can reach an estimated US$29.7 bn, at a CAGR of approximately 40% between 2020-2027.

The first name which comes to your mind when I talk about charging stations is Tata Power.

India's largest integrated power company, Tata Power is aggressively expanding its electric vehicle charging network.

Tata Power's charging accessories are present across all segments of the EV - public charging, captive charging, home charging, and workplace charging.

It has also deployed all types of chargers including DC 001, AC, Type2, Fast DC chargers up to 50kWh and also up to 240kWh chargers for e-buses.

Imagine the growth Tata Power will witness if this EV charging industry actually grows by the estimated 40% over the next few years.

Here are some of Tata Power's initiatives:

  • Launched Mumbai's first public EV charging station at Vikhroli in August 2017.
  • Launched nine EV charging stations at a recent event.
  • Installed captive charging stations at customer's premises in Hyderabad.
  • Provided customers with end-to-end EV charging infrastructure solutions.
  • Two charging stations installed for 2-wheelers and five stations for 4-wheelers in association with Hero Electric and Mahindra in Delhi.
  • Launched software platform and mobile application to help customers locate EV charging stations, charge EVs and pay bills online.

There are many other notable additions to this list. Tata Power currently has a presence in more than 92 cities in India with over 600 charging points.

Notable tie-ups

Tata Power has tie-ups with EV makers like MG Motor India, Jaguar Land Rover (JLR) India, and Tata Motors for charging infrastructure.

Tata Motors has partnered with Tata Power to set up over 300 fast-charging stations over diverse cities across Delhi, Mumbai, Bangalore, Pune, and Hyderabad.

These partnerships help the company as whenever the EV makers launch cars in specific geographies, Tata Power's charging infrastructure is already set up there.

Tata Power's tie up with the Central Railway Mumbai in association with the UN Environment Programme (UNEP) for charging facilities at railway station precincts is a notable one too. Tata Power will launch EV charging points at Mumbai's railway stations.

Now, oil marketing companies (OMCs) are also readying plans for EV segment. Indian Oil Corp (IOC), the largest refiner and marketer, has installed 257 EV charging stations at its retail outlets and is planning another 1,800 stations this fiscal.

Hindustan Petroleum Corporation (HPCL) has tied up with three entities including Tata Power for facilitating setting up of charging infrastructure at its retail outlets.

Tata Power also has memorandum of understandings (MoU) with Indraprastha Gas and government of Maharashtra for deploying EV charging infrastructure.

Government support

Through various policy initiatives such as the National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) Scheme, the government is giving a much needed push.

Recently, the government announced the extension of the FAME II scheme and several states like Maharashtra, Gujarat, Rajasthan, and Delhi have announced their own policies for the faster adoption of EVs. Under the FAME II scheme, 350 new EV charging stations have been installed across the country.

Here's a summary of stations that have been installed in each city.

The government is actively formulating guidelines such as setting EV charging infrastructure by the Ministry of Power, amendment in model building bye-laws (MBBL-2016) for EV charging infrastructure by Ministry of Housing and Urban Affairs, etc.

As per a report, the EV adoption in India would need 4 lakh charging stations by 2026.

The government has already planned to set up charging stations at every 3 kilometers (kms) in cities and every 25 km on both sides of highways to enhance accessibility.

Tata Power plans to become the leading EV charging network provider in India with over 1 lakh chargers installation by fiscal 2026.

Stock performance

When it comes to EVs, it's not only the EV manufacturers that will benefit, but the whole industry including companies that make components, etc. For example, companies doing business in making lithium batteries, charging stations, and related parts.

Investors have been quick enough to identify that Tata Power is involved in the EV space and making notable developments. In the past twelve months, Tata Power share price has seen a significant increase of 107%. On a year to date (YTD) basis too, shares are up 63%.

At the current price of Rs 127, Tata Power commands a marketcap of Rs 404.5 bn.

Promoters held 46.9% stake in the company as of June 2021, while FIIs held 11.3%.

To know more, check out Tata Power's latest shareholding pattern.

About Tata Power

Tata Power, a Tata Group company, is involved in the generation, distribution, and transmission of power. It has a licence for bulk supply of electricity in the city of Mumbai.

The company supplies power to BEST in the Mumbai licence area. Besides, it supplies to retail consumers including high-tension (HT) industrial and commercial consumers in Mumbai.

Erstwhile known as Tata Electric, the company pioneered the generation of electricity in India nine decades ago. The company started as Tata Hydroelectric Power Supply Company in 1911.

It got its new status with the amalgamation of two entities viz, Tata Hydroelectric Power Supply Company and Andhra Valley Power Supply Company in 1916.

Today, it's India's largest private power utility.

To know more, check out Tata Power company fact sheet and quarterly results.

For a sector overview, read our power sector report.

You can also compare Tata Power with its peers.

Tata Power vs Torrent Power

Tata Power vs Adani Power

Tata Power vs Power Grid

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "How Tata Power is Riding the EV Opportunity Without Making Any Cars". Click here!