Electric Vehicle (EV) charging station setup cost in India

India’s foray into electric vehicles began less than five years ago in 2020. During that time, we have gone from saying that EVs don’t stand a chance in the Indian market due to a lack of infrastructure, to EVs accounting for 6.5 percent of total car sales in 2023. It is then safe to say that Indian consumers have taken a fancy to electric vehicles and EVs are here to stay. While no one was willing to invest in EV infrastructure five years ago, people are now willing to set up EV charging stations as a side hustle. Due to government incentives being in full swing and the mass-scale adoption of EVs being a question of when instead of how, it is no longer a risky proposition. 

So, how does one set up an EV charging station? What are the costs associated with it? What does it take to operate an EV charging station?If these are questions that you want answers to, then, you are in the right place as we have put together this article for those who are looking to set up their own commercial EV charging station.

Costs of different types of EV charging stations

For anyone looking to set up their own commercial EV charging station, the most important thing is to decide on the type of charging station. To get a better idea of the different types of EV charging stations and their approximate costs, take a look at the table below.

*The price range does not take into account the subsidies offered by different states and the final price, once these subsidies are applied, the cost will vary.

As you can see from the table above, different charging stations cater to different types of vehicles. Therefore, before you start the process, you need to choose the type of EV charging station you want to set up. If you are operating out of a busy urban hotspot, you should look at providing charging to both two wheelers and four wheelers. However, if you are planning to open an EV charging station on the highway, you would be better suited in catering to four wheelers. Ultimately, it will depend on the type of EV traffic frequenting the area where you want to set up an EV charging station.

Guidelines and standards to set up an EV charging station

The government policy around EV vehicles has put in place specific standards which are necessary to set up an EV charging station in India. However, you don’t necessarily need to worry about them as they pertain to manufacturers of EV charging stations. For those of you who want to get a better understanding, the table above states the power and voltage requirements from EV charging stations of different categories. Apart from that, there are also guidelines around payment solutions and location access. 

IMAGE: https://www.shutterstock.com/image-photo/electric-cars-charging-modern-ev-station-2464612645

The government has set simple guidelines, requiring each EV charging station to include an integrated payment solution. As for access, the EV charging station should be in a public spot that can be accessed by the relevant vehicles and should also be accessible to people with disabilities.

How to set up an EV charging station in India?

There are two ways in which you can go about setting up an EV charging station in India. The first method requires a lot of technical expertise and legwork. The second method is relatively simple.

First method

There are many manufacturers of EV charging stations in India today. To name a few, you can pick between Okaya, EESL and Servotech. You can directly reach out to these manufacturers to purchase an EV charging station. These EV stations will meet all the manufacturing guidelines set by the government. However, as far as location guidelines are concerned, you will be required to meet them on your own.

For starters, you will have to meet all the formalities of getting an electricity connection and finding the perfect location. Next, you will have to find a way to drive traffic to your charging location. Lastly, you will have to figure out the payment system. These large expenses make it difficult to run a single EV charging station profitably. This method is more suitable for those who want to establish many EV charging stations at the same location.

Second method

Instead of reaching out to an EV charging station manufacturer, you should reach out to companies that already offer EV charging facilities. To name a couple, Tata Power and Statiq are two of the most widely used brands in India. Popular brands can differ from region to region and you should inquire in your local region about such companies before deciding on one.

Brands like Tata Power and Statiq have already installed hundreds of EV charging stations and are well versed with the process. They will provide you with the EV charger, and more importantly, they will onboard you on to their platform. This means that your EV charging station will be live on their application. This will allow EV drivers to find your charging station easily and use it. These brands also handle the payment system for you. The only part of the puzzle that you have to solve is the location.

If you are starting small and lack technical know-how, partnering with a brand like Tata Power or Statiq offers the easiest way forward.

Also Read:MG Windsor EV unlimited km/year battery warranty explained

EV charging station setup cost in India

Several variables determine the cost of setting up an EV charging station in India. To start with, different types of EV chargers come at different costs. Then, there is the cost of the land. You could already own it, in which case it would be zero. Alternatively, you could lease it, and the pricing would then be different for different places. Apart from these two costs, you will also have to spend on getting an electricity connection for your EV charging station. The cost will differ from state to state. 

Most states currently offer subsidies on setting up EV charging stations, so it is a good time to set up an EV charging station. The subsidies reduce the cost of the electricity connection and the cost of the EV charging station. 

IMAGE: https://www.shutterstock.com/image-photo/jaipur-rajasthan-indiajuly-7-2023-view-2371295055

You will incur a one-time construction cost to install the EV chargers. To give you a number in mind, a company like Statiq is currently offering schemes to set up an EV charger starting at Rs 10 lakh per charger. You can calculate what it will cost you to set up an EV charging station once you factor in the variables mentioned above and assign a cost to them.

Revenue model

You can create a revenue stream from your EV charging station using the following methods:

• Your biggest revenue stream will be the money that people pay for using the EV charging station.
• Next, you can collaborate with outdoor advertisers and make space available for advertising.
• You can also position a convenience store or a cafe near the charging station, so people who are waiting for their EV to be charged have something to do, or can stock up on supplies.

These above mentioned practices are followed by a majority of EV charging station owners across the country. To simplify things, one part of your revenue stream will be the money made in user fees. The second part will be advertising. Lastly, you can create spending opportunities for those who are waiting while their EV is charging.

EV charging station franchise in India

As we had mentioned earlier, the best way for most people to enter into the EV charging station business is by partnering up with a major player. Apart from Tata Power and Statiq, there are other major players as well that you can target. They are:

• Charzer
• Fortum India
• Exicom
• Okaya
• ABB India
• Delta Electronics India
• Alpha EV

These are all relatively new companies and are regionally popular. Most of them have a franchise cost of ₹ 1 lakh to ₹ 2.5 lakh. Apart from that, all of them offer different types of EV charging stations. Relatively new companies in the market don’t charge any franchise fee to welcome new business. It can be a good opportunity for those looking to minimise the upfront cost of setting up a new EV charging station. The companies listed above also set a minimum space requirement for their EV charging stations. As the market is relatively new, you can strike deals with these companies on an individual basis. Once the market becomes saturated with more players and the current players become seasoned enough, you will then have to comply with the deal these companies offer.

Factors affecting EV charging station costs

Currently, the costs around setting up an EV charging station are stable. That is because the government is going full steam ahead on the subsidy front, and thus, the cost of most expensive components gets absorbed to an extent. Apart from that, land plays a major role in the cost of setting up an EV charging station. Fluctuating prices of land can play havoc when it comes to EV charging station costs. Lastly, the rate of electricity is also crucial to set up an EV charging station. Fluctuations in the electricity rate will impact your overall costs.

Things to keep in mind

Although we have covered most of the key points, there are a few additional considerations you should keep in mind. You will only be able to maximise your EV charging station, if there are a good number of EVs in your area. If the adoption of electric vehicles is slow in your area, then, it would be a good strategy to wait and watch and see how things progress.

Also, as you will be selling electricity, you need to understand a little about electricity as well. You should have basic knowledge of electricity units, and most importantly, understand transmission losses. This is basically energy that is lost as heat while delivering power from the power station to the electric vehicle. Any transmission loss that happens once the electricity has gone past your electricity meter will be an inefficiency in your business. You should position your EV charging stations in a cool area to minimise such losses.

Conclusion

With the advent of electric vehicles all but sure, an EV charging station is a promising commercial venture. However, like any commercial venture, it requires a thorough case study. While we have done our best to address all the basic concepts around setting up an EV charging station, there will be challenges that differ from region to region. Therefore, it is best to first do your own research using the information we have shared in this article, and once you have done that, only then should you put your money down on an EV charging station.

Also Read:Tata Electric Cars in 2024: Unbeatable Mileage, Price, and Features

FAQs

Q. What is the cost of an EV charging station? 

The cost of an EV charging station can range anywhere from ₹ 10,000 to ₹ 15 lakh. The actual cost will depend upon the rating of the charger and its use case scenario.

Q. What is the initial investment required for an EV charging station?

Popular EV charging brand Statiq has options where you can set up an EV charging station from a starting cost of ₹ 10 lakh.

Q. What is the profit margin of EV charging stations?

The profit margin on EV charging stations currently rests anywhere between 15 to 30 percent.

Q. How much does it cost to charge an EV at a public station?

Different companies charge differently for their products. However, as an estimate, it costs about ₹ 12 to ₹ 17 per unit of electricity to charge an EV at a public station.

Q. Are there any hidden costs associated with EV charging stations?

Most costs of an EV charging station are mentioned upfront. However, most business owners later discover that they must account for ongoing maintenance costs for EV charging stations. This can come across as a hidden cost.

Q. What are the factors that influence the cost of an EV charging station?

There are several factors that influence the cost of an EV charging station such as the type of charging station, the price of land and the rate of electricity.