India is projected to be the third largest automotive industry by 2030. India has huge renewable energy resources and skilled manpower in manufacturing and technology sectors. And therefore, shifting the focus to electric vehicles (EVs) will increase resources. According to research studies by the Center for Energy Finance, it is expected to create a market opportunity of USD 206 billion by 2030. However, if turns are possible in the coming years, it will require a cumulative investment of USD 180 billion. in production and charging stations.
According to research by the e-Amrit portal in India, India registered only 7,96,000 electric vehicles in December 2021, while it registered only 1,800 charging stations in 27 states and territories of The union. Thus, it clearly shows that the ratio is lean compared to the recommendations, and that there is still a long way to go to achieve the objectives. Moreover, electric vehicles are at 2%, while traditional vehicles are present at 98% in India. Thus, the Indian electric vehicle industry is also multiplying after government support.
Today in this article, we will discuss some basic terms and how one can apply for an EV charging station loan.
What are electric vehicle charging stations and the associated installation costs?
Charging station- An EV charging station is a kind of equipment that connects the EV to the electricity source for charging. The government requires electric vehicle charging stations to be placed every 3 km in cities and every 25 km on both sides of highways. On the other hand, for heavy goods vehicles, charging stations must be installed every 100 km on the roads.
Expected stations- Since the number of charging stations is only 1800, the electric vehicle industry needs to set up more and more charging stations as much as possible. It is planned to install more than 70,000 charges across the country over the next five years.
Government authorization– The Indian government has clearly stated that any individual can install charging stations without getting a license all over India, provided that the charging station meets the standards set by the Indian Ministry of Electricity. This initiative was taken to boost the electric vehicle industry.
Types of chargers-There are three types of chargers, among which level 1 is the basic charger and level 3 is the most popular which uses direct current and fast charging speed.
Setup costs: The configuration of an EV charging point varies between 1 lac and 40 lac depending on the types of chargers to be installed and the investment capacity. However, we can estimate installation costs as follows-
|Charger Type||Likely costs|
|Type 2 AC-7/22KW||1,00,000|
Additional costs- Besides the cost of the chargers, installation is required and below costs also need to be incurred-
- Civil works – 2,50,000
- EVSE Management Software + Integration – 40,000
- Technicians, labor and maintenance – 3.50,000 per year
- Marketing – 50,000
- Electrical connection – 7,50,000
- Annual land lease – 6,00,000 (when the land is leased)
We can say that it is almost a cost of about 40 lacs, and not everyone who wants to install an EV charging point can install it. Therefore, some companies offer loans for EV charging stations, and one can consider it and apply for the loan.
How do I apply for a business loan for an EV charging station?
Government take- Since the government has removed the license from the installation of electric vehicle charging stations to support the electric vehicle industry, a company can easily arrange loans from banking or non-banking institutions.
Terms and conditions:
Few criteria must be met by companies to obtain a business loan for EV charging station:
- Existence of a business- The business must be in operation for at least 6 months before applying for the loan.
- term of the loan– It varies from 3 to 4 years.
- Termination of the loan– It can be refunded after paying at least 1 EMI.
- Interest rate- The standard rate ranges from 12% to 24% per annum.
- Eligibility Criteria- The person submitting an application must meet the eligibility requirements of the application, as indicated in the checklist.
- Conditions- All documents mentioned in the application form must be certified with the form.
- Meticulous examination- After obtaining all the documents and application forms, the bank will review them and accordingly offer the loan with the best possible rates.
Frequently Asked Questions (FAQ)
- How much does it cost to install an EV charging station?
It depends on the types of chargers installed. In general, for a 250KW charger, the installation costs range between 1 and 40 lacs, including rent, maintenance, worker’s salary, etc.
- Can I repay the loan before maturity?
Yes, you can repay the loan but only after paying the first installment.
- Do I need a permit or license to operate a charging station business?
No, the government has canceled the policy of operating a business in the electric vehicle industry. So you don’t need to take out a permit.
- What is the term of the loan?
It’s 3 years; however, you can ask your bank to extend it to 4 years.
- What is the interest rate charged by the banks?
Banks charge the standard rate of 1-2% per month, depending on the customer’s credit score.
- Can I also take out a loan for additional expenses such as lease rents?
Yes, banks provide loans for the installation of charging stations and all necessary additional expenses.
- What should my professional life be like before applying for the loan?
The business must be in operation for at least 6 months before applying for the loan.
- Can I complete the application form offline?
Yes, you can go to the bank branch and complete an application by taking the necessary help from the bank officers.
- Will I be charged for loan repayment before the loan term expires?
No, there are no such fees.
- Can I apply for a loan if my business is in the pre-income phase?
No, commercial loans for EV charging stations only when you have earned a minimum income which differs from bank to bank.
- In how many days will I benefit from a loan?
The bank will grant you a loan once your documents have been reviewed.