Best Electric Vehicle (EV) Stocks in India

Created on 29 Jan 2022

Wraps up in 6 Min

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Updated on 16 May 2024

Best Electric Vehicle (EV) Stocks in India

Ever since humanity invented the wheel, modes of transportation have had several reshapes. Therefore, with the evolution of time, the automobile industry also had to make dynamic and proactive changes every now and then to capture the depth of its target market and expand its customer base.

Following a well-known proverb that says, “Necessity is the mother of invention,” the automobile industry had to time and again reboot its traditional machines to keep up with the ever-changing and dynamic business environment.

The automobile sector in India is witnessing a technological change with the advent of EVs. However, compared to developed countries, the distribution of and innovation in electric powertrain technology is in a very budding stage in India. Thus it seems an attractive opportunity for the investors who want to invest in the future of the automobile industry. 

In today’s blog, we discuss the prospects of the EV Industry and the Top 5 stocks that can possibly improve your portfolio's performance.

Industry Overview

The automobile industry contributes around 7.5 % to India’s GDP and a whopping 49 % of manufacturing GDP, with a significant rippling impact on the economy. This means that as the EV industry grows and gains popularity, multiple auto ancillaries and related sectors will also experience growth, provided they can keep up with the trends.

According to the Industry body SIAM, the industry directly employs 8 million people in the manufacturing and services sector, including dealerships. The automobile sector in India comprises a vast portfolio. It includes two-wheelers(2W), trucks and cars(4W), buses, and auto-rickshaws (3W) and plays a crucial role in the country's economic development.

India was the largest manufacturer of tractors and the second-largest bus manufacturer in 2020, and it was also the largest producer of 2W AND 3W worldwide. Vehicle penetration is expected to reach 72 vehicles per 1000 people by the end of 2025. India accounts for 40% of the total $31 bn of global engineering and R&D spending, and 8% of the country’s R&D expenditure is in the automotive sector.

What will the EV market look like in future?

The Automotive Mission Plan (AMP) 2016–26 captures the collective ambition of the Indian government and automotive industry regarding the industry's size, contribution to India’s development, global footprint, and competitiveness.

The AMP envisions that the sector will contribute more than 12 % to India’s GDP and constitute more than 40% of the manufacturing sector by 2026.

The auto sector is estimated to create around 65 million direct and indirect jobs over the next decade.

After analyzing the above facts, one cannot doubt this industry's potential for traction, growth, economic progress and prosperity.

But the big question is whether the industry's current roadmap and business model are viable and feasible in the long run to cater to a country of 135 billion countrymen.

Several years ago, this question, the advent of “Electric Vehicles” came. With the advent of EVs, the automobile sector in India is witnessing a technological change. India is at the cusp of an e-mobility revolution.

While it is not a global frontrunner in promoting and developing an e-mobility ecosystem, a range of compelling reasons make this paradigm shift in mobility seem inevitable and prudent. The current acceptance of EVs in India is low, in contrast to China, Europe and Russia, which jointly account for 94% of the market share of EV vehicles.

Why must we happily switch to EVs?

“Is there light at the end of the tunnel?” seems to be the buzz question these days about the EV revolution that our country is about to witness in the coming decades. Many startups, OEMs and manufacturers have started analysing the opportunity trends in the sphere and have also started making significant headway.

Though progress is slow because of various unending infrastructural and ecosystem challenges, the vision is commendable.

A desire to reduce pollution levels, thereby improving air quality and dependence on oil imports, has bolstered the case for EV adoption.

Adoption of EVs shall reduce India’s dependency on other nations because petrol and diesel, which are fuels for internal combustion engine (ICE)—based mobility systems, require an extensive and costly supply chain that is prone to disruption from weather, geopolitical events and other factors.

EVs, on the other hand, shall use electricity as a source of energy to provide power to their vehicles. Over the last decade, advances in wind and solar electricity generation technologies have drastically reduced the cost of electricity generation and introduced the possibility of clean, low-carbon and inexpensive power grids.

Top 5 EV Stocks

The top 5 Stocks from diverse segments within the automobile industry that can capture the EV market in India are:

  1. Hero Electric (Two-Wheeler segment):

Hero Electric, an offshoot of Hero MotoCorp, is the leading manufacturer and distributor of two-wheeler electric vehicles in India. The company has a first-mover advantage in this segment.

Hero Electric has also gained the Indian population's favour with its affordable scooters. The current product line consists of Photon, Optima, NYX, Flash and Atria. These models come in comfort speed (LX) and city speed (HX) variants. The Optima and NYX models also have double battery variants.

The variety of models, along with the first-mover advantage and popularity, spell a possibly bright future for the company. Those willing to ride this share can invest in Hero MotoCorp shares.

  1. Tata ELXSI (Software segment):

Tata ELXSI develops and releases automobile software. Initially, this software was only necessary for car media systems. Now, it’s a different situation.

EVs are intrinsically different from traditional ICE vehicles, as pure EVs do not have a gearbox. EVs only need a single gear that controls power transmission. This is because EV motors do not need to undergo the combustion process to reach proper power output levels.

Therefore, power transmission from the motor to the drivetrain is no longer a mechanical process. The single-speed motor simply accepts more power to transmit the same. This is controlled by a smart drive selector, which is a software-based element of the automobile. This is where Tata ELXSI shines the brightest.

  1. Amara-Raja (Battery segment):

Well, the most necessary part of an electric car is its battery. Just because fossil fuels aren’t needed doesn’t mean the vehicle needs no fuel at all.

The company is also engaged in other auto-ancillary segments. In case Amara Raja doesn’t ring a bell, I’m certain Amaron Batteries do.

Amara Raja Batteries Limited, the flagship company of the Amara Raja group and the creator of Amaron Batteries, is the largest producer of automotive batteries in India. The company also has a strong presence internationally with greater influence in the Asia-Pacific region.

  1. Tata Power (Charging infrastructure segment):

While EVs do run on batteries, these aren’t the easily replaceable AA kind. EVs need to be “refuelled” at specific charging points (no, your regular wall socket won’t do the trick).

Tata Power is making headway in developing the appropriate infrastructure to sustain the incoming EV movement. The company is engaged in erecting public structures for recharging fleets and public transport, as well as developing retail options to allow personal vehicles to be recharged with residential power lines.

  1. Mahindra & Mahindra (EV car sales in India):

So far, we’ve discussed the 2 wheeler segment and ancillaries of the EV industry. Now comes the big guns (cars, actually).

Mahindra & Mahindra has India’s largest EV portfolio under a single corporation. The company offers both private and public transit options. The product line has the eVerito & e20 Plus for private drivers and fleets and eSupro, eAlfa Mini, Treo & Treo Zor in the public transit segment.


The future of the automobile industry definitely lies in the EV segment. It’s not a question of “if” but “when” EVs will become the mainstay of the country's transportation.

With everything new, there are obvious apprehensions among the country's people, as well as institutional red tape. But should the companies mentioned above survive the transition, the shares show promise of performing well when EVs come to India. So, it is best to keep an eye out for the stocks mentioned above and more on Ticker.

So what will you do? Will you ride the EV wave, or will you watch the race from the bleachers? Let us know in the comments below.

*Disclaimer: The stock(s) discussed above aren't recommendations from Finology; they are only picked to help you understand the concept.

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Aakarsh Bedi

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Aakarsh is pursuing his post graduation from N.L. Dalmia Institute, Mumbai with his major specialization being accounting and finance. His curiosity for content writing has made him put together series of articles for diverse magazines. He considers penning down his thoughts as a soul relieving activity.

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