How to Start EV Charging Station Business

Electric vehicles (EVs) are the future of the automotive industry and are slowly gaining popularity in India.

However, the main issue is the lack of adequate charging infrastructure in the country. As a result, starting an electric charging station business in India is a lucrative opportunity for entrepreneurs who want to invest in the EV sector.

This article provides a complete guide on how to start an EV charging station business in India, including the requirements, process, and business plan.

Table of Contents

Types of Vehicles for EV Charging Stations

The sorts of vehicles that the charging station will serve must be decided before opening an EV charging station business. In India, EVs can be classified into three different categories: two-wheelers, three-wheelers, and four-wheelers.

Due to the fact that commercial vehicles typically drive more miles than private vehicles, their charging requirements are typically higher. Therefore, faster charging options are needed for commercial EVs.

As a result, it is crucial to take into account the kind of EVs that the charging station will support because this will influence the equipment needed for charging and the station’s placement.

Location for EV Charging Station

Choosing the right location is crucial when starting an EV charging station business. It is recommended to set up the station in a densely populated area with ample parking space, such as commercial parking spaces, mall parking lots, and housing societies with adequate parking facilities. It is important to ensure that the location has proper entry and exit points to enable smooth vehicle movement, and the charging towers and equipment should be installed in a safe and secure area.

Additionally, the location should have an uninterrupted power supply and proper drainage and sewage systems.

Process of Starting an EV Charging Station Business

Once the location has been identified, the next step is to set up the EV charging station. Here are the steps involved in the process:

Land: You need to acquire land or lease the parking space of a mall, housing society, or any commercial building.
Electricity Connection: You need to apply for an electricity connection and obtain a transformer with a 33/11 KV heavy-duty cable.
Charging Equipment: You need to get a quotation from various suppliers for charging towers, AC & DC chargers, and other electrical components.
Civil Work: You need to ensure that the charging towers and equipment are installed securely with shades and CCTV cameras. The entry and exit of the charging station should be smooth without any discomfort.
Clearance Certificate: Once the charging station is set up, a person from the DISCOM (electricity distribution company) will inspect the setup and issue a clearance certificate if it meets the guidelines on technical, performance, and safety grounds.

Requirements for Starting an EV Charging Station Business

The requirements for starting an EV charging station business in India are as follows:

Land: The land required for setting up the charging station depends on the number of charging stations you plan to install.
Electricity Connection: You need to apply for an electricity connection and obtain a transformer with a 33/11 KV heavy-duty cable.
Charging Equipment: You need to install AC & DC chargers, CCS chargers, CHadeMO chargers, and Type 2 AC chargers as per government guidelines.
Civil Work: You need to install charging towers with shades and CCTV cameras. The entry and exit of the charging station should be smooth without any discomfort.
Clearance Certificate: You need to obtain a clearance certificate from DISCOM after setting up the charging station.

Investment and Profit in EV Charging Station Business

The total cost required to launch an EV charging station business will depend on the quantity of installed stations as well as the location of each station. The first investment may be as little as 10 lakhs Indian rupees.

Now that you know the fundamentals of what is needed to set up an electric charging station and how it is done, let’s talk about the capital needed to launch this enterprise.

Investment Required for an EV Charging Station Business

The investment required for an electric charging station business can vary depending on the location, size, and type of charging stations you plan to set up.

Here is a rough estimate of the investment required to start an EV charging station business in India:

Land: The cost of land can vary depending on the location and size of the charging station. If you already own the land, this cost can be eliminated. Otherwise, leasing or renting the land can cost anywhere between Rs. 10,000 to Rs. 50,000 per month.
Electrical Setup: The cost of electrical setup including transformers, cables, and other electrical components can cost between Rs. 2 lakhs to Rs. 5 lakhs.
Civil Work: The cost of civil work including charging towers, shades, CCTV cameras, and flooring can cost between Rs. 3 lakhs to Rs. 5 lakhs.
Charging Equipment: The cost of charging equipment including AC and DC chargers can range from Rs. 50,000 to Rs. 2 lakhs per unit.

Considering all these costs, the total investment required to start an electric charging station business can range from Rs. 10 lakhs to Rs. 30 lakhs.

Profit Potential of an EV Charging Station Business

The location, scale, and kind of charging stations you intend to erect can all affect the business’s potential for profit. However, the profit potential is quite high due to the rising demand for electric vehicles and the government’s focus on promoting electric mobility.

On average, an electric charging station can charge anywhere between Rs. 5 to Rs. 10 per unit of electricity consumed. This means that if a customer charges their electric vehicle with 20 units of electricity, they will have to pay between Rs. 100 to Rs. 200. Assuming that you have 10 customers per day, your daily revenue can range from Rs. 1,000 to Rs. 2,000.

Assuming that your average revenue per day is Rs. 1,500 and your total investment was Rs. 20 lakhs, you can expect to recover your investment in about 3 years.