Electric vehicle push reshaping energy, auto sectors on D-Street, led by Reliance Industries and Adani Group

By Vaibhav Agrawal

The ever-rising carbon footprint will damage the world permanently, and what’s even more concerning is that India stands 3rd on the list of ‘Top 10 Polluting Countries’ after China and the US. The after-effects of pollution can already be felt in the air and our bodies. As we all know, the climate crisis is on top of the list for many nations. This has also been the driving force behind India’s electric mobility commitment toward a net-zero emissions economy by 2070.

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Car manufacturers in India are firm on bringing newer and affordable models. The adoption rate of EVs also supports the car makers in building supporting structures like charging stations and renewable energy production. With this massive transition, we can already see a wide array of options in two-wheelers and four-wheelers in the country today. Most brands in India have their own EV variant. Research has pointed out that one-third of vehicle manufacturers will abandon internal combustion engines in favour of going electric by 2025. This figure will further rise to 40% by 2040. This only indicates a massive underlying opportunity in EVs and EV-related industries in India.

To push the EV transition, both central and state governments offer various incentives to buyers and manufacturers. In September last year, the government approved a production-linked incentive scheme (PLI) worth Rs 26,000 crore to accelerate the manufacturing of fuel cell vehicles and drones. This scheme is expected to drive a fresh investment of around Rs 42,000 crore in the auto industry over the next five years. There’s also the vehicle scrappage policy that aims to phase out unfit and polluting vehicles. It is set to be implemented for private vehicles in 2024. Along with this, state governments are also encouraging EV adoption.

We can also see a big move in the stock market these days. The auto sector that hit rock bottom in 2020 is now in demand. Meanwhile, India’s largest conglomerate, Reliance Industries, is shifting towards renewable energy. Reliance stands as a pioneer in the plastics and petrochemicals industry, but the conglomerate is in support of creating a green ecosystem. The company has proposed to invest over $50 billion in Gujarat over 10-15 years to set up a 100-gigawatt renewable energy power plant.

As we all know, Adani Group had already ventured into the clean energy space. Gautam Adani, Chairman of Adani Group, has already declared to invest $20 billion in renewable energy over the next decade. Primarily into power generation from solar and wind energy, a small part would go to hydrogen power. When you see India’s two largest conglomerates betting big in the renewable energy space, others follow the lead too. 

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That’s what is happening in the stock market. It has become an exciting place to be. Investors are upping their stake in the auto and energy space. Adani Group’s stocks have risen over 100% in share price since the last year. While auto stocks like Tata Motors, Maruti Suzuki, Hero MotoCorp etc., have increased investors’ wealth by nearly 50%, Reliance Industries’ share price has also increased by over 20% in the last year.

Dalal Street’s focus has shifted towards sectors that are getting into clean energy. Earlier everyone bet heavily on banks, IT and FMCG sectors, but now the larger picture includes sectors diving for a better tomorrow. So, it’s expected that many industries will change their operations in the coming years, and investors will bet highly on clean energy companies, so keep a close eye.

(Vaibhav Agrawal is Founder, TejiMandi, Views expressed are the author’s own. Please consult your financial advisor before investing.)