Electric mobility is steadily transforming India’s road ecosystem. The government is actively working for greener transport. Major automakers are introducing new models of electric vehicles. This transition provides a unique opportunity for investors and entrepreneurs. They can start investing in EV charging stations to enter the business of electric vehicle charging stations. If you are keen to know how to set up EV charging stations in India, then this guide provides a step-by-step explanation.
Understanding the EV Charging Infrastructure in India
EV charging infrastructure in India doesn’t require a license, as the activity has been de-licensed by the Ministry of Power. Still, every operator must adhere to the technical standards established by the Central Electricity Authority (CEA).
The market is generally divided into three categories:
- Home Charging: Private chargers installed at residences.
- Captive Charging: Charging infrastructure for exclusive use by a company’s own fleet (e.g., delivery logistics).
- Public Charging Stations (PCS): The PCS are commercial charging stations open to the public. The EV owners pay to charge their vehicles. PCS is the primary focus for most of the investors looking at an EV charging station business model.
Types of EV Chargers
Understanding charger types is essential before estimating the cost to set up an EV charging station in India. In general, EV chargers can be classified into two broad categories: AC and DC chargers. Here is a little more about AC/DC chargers for EVs in the pointers below:
AC Chargers (Slow to Moderate Speed)
AC chargers are smaller and usually cost less. The EV charging stations cost in India depend on the vehicle’s own system to convert power and are best suited for places where vehicles stay parked for longer periods.
Example: A vehicle parked at an office for six to eight hours can comfortably charge using an AC charger.
DC Chargers (Fast to Ultra-Fast)
The DC chargers convert power externally and feed it directly into the vehicle's battery, bypassing the on-board charger. May offer faster charging speed. EV adoption in India with DC chargers is essential for highways, petrol pumps, and commercial charging hubs where quick turnaround is necessary.
Comparison of EV Charging Standards
Below is a general comparison of common EV charging standards for quick reference:
Note: The Bharat EV charger standards (Bharat DC-001 and AC-001) were early standards primarily for low-voltage vehicles (72V-200V). For modern electric cars, the CCS2 (Combined Charging System) standard is the more critical requirement.
Business Models That Work for an EV Charging Station Business
Investors typically choose between three primary business models when entering this sector. Your choice depends on your risk appetite, capital availability, and level of involvement. Below are the types of EV charging stations:
1. Company-Owned, Company-Operated (COCO)
In this model, a large charge point operator (CPO) owns and runs the station. They lease the land from a landowner. If you own land but do not want to invest in equipment, you may lease your property to a CPO for a fixed monthly rental.
2. Franchise-Owned, Franchise-Operated (FOFO)
This is the standard ev charging station franchise model. You (the franchisee) invest in the equipment, land setup, and electricity connection. These covers branding, software, and technical support. To operate the station or retain the majority of the revenue, you need to pay a royalty or software fee to the CPO.
3. Franchise-Owned, Company-Operated (FOCO)
The "Investor Model," is popular amongst investors looking for passive income. These investors indulge in this mechanism of the hardware and setup. They use the CPO only to manage daily operations, maintenance, and marketing. Revenue is usually shared between the investor and the company.
Example: A landowner with a free corner plot near a mall can lease the space to a CPO under the COCO model. They can also invest in chargers to run it independently through FOFO, or invest while allowing the CPO to manage operations through FOCO.
How Much Investment Is Needed to Start an EV Charging Station?
You may enquire, “How much does it cost to set up an EV charging station in India?” The EV charging station installation in India varies widely based on charger type and available electrical infrastructure. Below are the charging station installation costs:
Equipment Costs
Here are the EV charging equipment costs discussed below:
- AC Chargers: A Type-2 AC charger (7.2 kW to 22 kW) generally costs between ₹35,000 and ₹1.5 Lakhs.
- DC Fast Chargers: A 30 kW to 60 kW DC charger is significantly more expensive, typically ranging from ₹8 Lakhs to ₹15 Lakhs. Fast charging stations in India (150 kW+) can cost upwards of ₹25 Lakhs.
Infrastructure and Grid Costs
Beyond the charger, you must budget for electric vehicle charging infrastructure:
- New Electricity Connection: The EV charging infrastructure in India includes security deposits to the DISCOM (Distribution Company) and transformer installation if the required load exceeds a certain limit (usually 20-50 kW). A dedicated transformer for an EV charging station in India can cost ₹2 Lakhs to ₹5 Lakhs.
- Civil Works: Shed construction, flooring, branding, and safety bollards typically cost ₹1 Lakh to ₹3 Lakhs.
- Software: Charging management software (CMS) is essential for billing and monitoring. This is usually a subscription model costing ₹500 to ₹1,000 per charger per month.
Total estimated EV charging station business cost:
- For a basic setup (2 AC chargers): ₹2 Lakhs – ₹4 Lakhs.
- For a commercial setup (1 DC Fast Charger + 1 AC Charger): ₹15 Lakhs – ₹25 Lakhs.
These numbers indicate the typical EV charging station cost in India that investors may expect when entering the market.
Example: A small AC-based setup in a residential complex with two parking slots may need around three lakh rupees for chargers, civil work, and software, making it a practical starter option for gated communities.
Installation Steps for an EV Charging Station
If you are ready to proceed, here is a general workflow to help you navigate the EV charging station business process:
Step 1: Site selection
Identify a location with high footfall or traffic. Investors generally prefer public EV charging setup locations like malls, highway motels, restaurants, and residential societies for fast charging stations in India.
Step 2: Read the feasibility
Check and analyse the grid capacity in the area. Is a three-phase connection available, or is there a need for a new transformer? Also, the battery swapping policy is to be checked.
Step 3: Partner selection
While investing, go for a reliable EVSE (Electric Vehicle Supply Equipment) manufacturer. Consider opting for a franchise or choosing a CPO with a strong track record.
Step 4: Application
Apply and submit the form required for the local DISCOM for a new EV connection.
Step 5: Civil works and installation
Once the load is sanctioned, prepare the site. Work on the concrete foundation for the EV charger and set up the canopy.
Step 6: Software integration
Connect your charger to a charging management software (CMS). You can also opt for options such as Tata Power, Statiq, or specialised white-label software. This lets users locate your station and pay digitally.
Step 7: Go live
Once tested and certified for safety, your station is ready for public use.
Related Reading: If you are planning to start or expand an EV charging station business, you may also find our article “Place of Supply in GST: Meaning, Importance, and Types”.
Growing Opportunity for the EV Charging Station Business in India
Starting an EV charging station business in India can be a forward-looking investment choice. Invest in charging stations with supportive schemes like PM E DRIVE and flexible business models through both franchise and self-owned routes, entrepreneurs can create profitable charging hubs that serve growing EV users. The sector still has significant room for expansion, making this a practical time to enter the market with a model that suits your budget and long-term goals.
For a great start to your EV charging station business, consider exploring green financing options for electric vehicle charging at Shriram Finance.
FAQs
1. How much does it cost to set up an electric charging station?
The investment in EV charging stations cost varies by charger type. A slow AC charging setup may cost ₹1 lakh to ₹4 lakhs. A commercial DC fast charging station typically requires an investment between ₹15 lakhs and ₹25 lakhs, including infrastructure and grid connection costs.
2. Is the EV charging business profitable in India?
Yes, it may be profitable, but it is a long-term investment. Profitability depends on high utilisation rates. With a margin of ₹3–₹10 per unit of electricity, investors typically see a return on investment (ROI) within 3 to 5 years, depending on the location and traffic.
3. How long does it take to install an EV charging station?
The timeline depends on the power connection. Physically installing the charger takes only a few days, but getting the load sanction and new meter from the DISCOM can take anywhere from 1 to 3 months.
4. How do I get permission for an EV charging station?
You usually do not need a special central license to start an EV charging station. Most setups only require a regular electricity connection, local approvals for civil work, and safety checks.
5. How much investment is needed to start an EV charging station?
Starting an EV charging station can cost anywhere from a few lakhs for a small AC-based setup to over ₹20 lakhs for a commercial layout with a DC fast charger. The final investment depends on charger type, grid upgrades, civil work, and software needs.