Want to invest in EV charging stations for some passive income? Here’s how to do it

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How to invest in EV charging stations for some passive income



Just a year ago, talking about electric vehicles was like talking about a future that is at least 5 years down the lane. Fast forward a few months, EVs are all hype. Many investors want to be part of a growing EV ecosystem by setting up much-needed charging infrastructure. But, is there a reasonable way to do it? Here we are discussing some important aspects to consider before setting up a charging station. Further, some prominent players in the ecosystem explain the steps required to set up such an infra.

There are a few things to consider when setting up an EV charging station

Types of EVs: In the passenger vehicle (PV) segment, two-wheeler and four-wheeler EVs have gained some acceptance. Electric scooters are more popular because of their versatility and mainly because scooters are made for short distances within the city. The four-wheeler EV is yet to see significant improvement but with companies like Tata Motors actively pushing full electric car models, we can expect a boom in the segment soon.

Real Estate: Real estate plays an important role in the success or failure of a charging station and this is where the major part of the investment will go. Access to charging stations and their visibility will depend largely on location. The availability of land on the side of the road or in the city center can be a deciding factor in the success of such infrastructure.

EV Charger Type: There are options of fast charger, fast charger and slow charger. Fast charging technology requires special compatibility with the vehicle to provide optimal charging speed. Fast chargers may not provide the same charging speed as fast chargers but they have a wide user-base. Slow chargers are the most commonly accessible and are often installed at home to charge cars overnight.

Easily accessible AC chargers provide power output from 3 kW to 22 kW whereas DC chargers can provide power output from 15 kW to 350 kW.

Here we talk to some of the leading EV players in the country about ways in which private investors can invest in setting up a charging infra.

How can one apply for a charging station to generate passive income?

Ebaikgo

First apply at www.ebikego.com/charge. The company will then call the applicant and inspect the location with their team for a qualification verification.

The team will then conduct an audit of the charger’s location and then provide installation, training. Eventually, the charging station will be listed on Google Maps and it will be live.

Tata Power

One can suggest a position that Tata Power teams will evaluate for suitability If the location is appropriate, they will sign up. Sandeep Bangia, Head – EV Charging, Home Automation, and ESCO Services, Tata Power

Magenta

The design team from Magenta will inspect the site and analyze the applicant’s proposal. They will handle the use with due diligence, talk to the fleet nearby to assess the demand and profitability of the charging station.

What are the minimum requirements for setting up a charging station?

Ebaikgo

The applicant will need at least 50 sqm. Feet area with a power connection that can accommodate 16 amp sockets.

Tata Power

Some of the requirements for installation are prominent location, direct road access, adequate power supply access, among others. These prerequisites, however, are finalized by the Tata Power team based on a detailed verification and selection of the location.

Magenta

The investor must have adequate real estate access for the installation and after conducting the audit, the applicant will be advised whether to proceed with the installation.

The investor has to bear the estimated cost to set up a charging station

Ebaikgo

8,000-10,000 for a 16 ampere charging unit

Tata Power

The cost depends on the charger configuration. The company could not be reached for comment.

Magenta

The DC charger will cost Rs 6-7 lakh and for cable-like peripherals Rs 3-4 lakh (price is affected by the input cost of the equipment).

It is important to note that fast chargers and fast chargers will require much more investment than ordinary 15/16 amp socket chargers because they provide much faster charging speeds, which makes them more commercially efficient.

Security

A typical three-pin plug is not an EV charging supply unit. Just setting up a plug point as a commercial EV charging station is not enough. Normal sockets are not designed to handle multiple user loads. Continuous plug-in and plug-out can lead to erosion, which leads to security risks.

Magentar co-founder and CEO suggests that investors who want to enter the charging ecosystem should focus on installing AC charging stations instead of DC charging stations. Considering that EV charging infra standardization has not yet been finalized, there will be a safe bet for individual investors to install AC chargers, which also requires less capital.

Note: This is not an investment advice. Investors should manage their due diligence before placing their money.

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