It would appear that the electrification of vehicles will bring about a significant shift in the automobile industry in India. Today, India is just beginning to develop a market for electric vehicles (EVs). There are a number of diverse Mutual Funds with exposure to electric vehicle (EV) stocks that we’ll discuss here.
- As of the fiscal year 2021-22, total sold out electronic vehicles were register as approximate 4,29,217 units as per the report / article published in the business standard.
- The public’s acceptance of electric vehicles is growing. Rapid expansion can be seen in the sales of electric vehicles, particularly in the two-wheeler market.
According the ‘Federation of Automobile Dealers Associations’ (FADA) of India, retail sales of electric vehicles experienced an increase in 2021-22 that was three times higher than the previous year.
Reasons for New Scheme Launches By Mutual Funds To Invest In Electric Vehicle
- SEBI has recently received applications from multiple mutual funds seeking to invest in electric vehicles such as Nippon India S&P EV Index Fund, Navi Electric Vehicles and Driving Technology Fund, Mirae Asset Electric Autonomous Vehicle ETF Fund.
- In recent years, investors have been able to choose from a wider variety of mutual funds (MFs) that are centered on specific investment types. Indian automakers are launching more electric vehicles (EV).
- Considering how much money some of the world’s largest automakers are investing in the development of electric vehicles, it appears that electric vehicle funds may also end up holding shares of those companies.
- When it comes to electric vehicles, not only are buyers in the Europe, China and United States showing a preference for them, but consumers in India are also taking notice.
Investments Made In the Electric Vehicle Sector
- Indian Giants have also made significant investment in EV Segment. The fund’s electric vehicle portfolio includes automobile original equipment manufacturers and support companies such as, Minda Industries, Precision Forgings, Sona BLW, and Tata Motors.
- It does so through its investments in Tata Power and RIL, which give it a foothold in the market for charging infrastructure. It has made investments in companies such as Tata Elxsi that develop software and other solutions that are similar to those used in electric vehicles.
- Tata Chemicals is also a supplier of chemicals used in the production, recycling, and manufacturing of lithium-ion batteries.
What Is The Best Course Of Action For Investors?
- If you’re a typical investor, you’ll probably want to wait until the EV space has matured.
- Investors who are interested in purchasing shares in an EV fund will need to explore the index or ETFs that the fund is based on, as well as the portfolios held by those entities.
- Every fund is trying to model its performance after a various index or Exchange Traded fund.
- Therefore, every plan will be unique with regard to the corporations and establishments that are involved. Due to the fact that the electric vehicle market is still in its very early stages, the stock selection process used by index values may cause some of them to place an excessive emphasis on particular process or product, while other metrics may totally ignore those technologies, systems or mode of making.
- Initial participation in EV Mutual Funds investment can be taken by investors who have a basic understanding of the emerging EV market and the companies in which the underlying funds invest.
- Investing in mutual funds is one of the most effective ways to profit from India’s rapid economic development.
- Just make sure that you choose the mutual fund schemes that are going to be the best fit for your portfolio.
Indian Market and Electrical Vehicle Future
- Global fuel prices are on the rise, import dependence is being reduced, and a significant reduction in carbon footprint is an ambitious goal, all of which could inspire a greater use of electric vehicles (EV).
- The fact that India possesses a relatively abundant supply of renewable energy resources, in addition to a workforce that is adequately qualified in the areas of research and development, technological advancement, and industrial production, would be beneficial to India.
- The electric vehicle market is expected to be flooded with new players. This will result in increased competition, which will drive down the price of electric vehicles.
- The electric vehicle (EV) industry appears to be on the verge of robust long-term growth, in spite of the current challenges related to shortages of semiconductor materials, these challenges are a result of the pandemic.
- By implementing the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) II policy, the central government of India intends to stimulate the growth of the EV industry. With this policy, electric vehicle (EV) manufacturers will be rewarded for their hard work and innovative ideas.
- Production-linked incentives have also been approved by the government to help India become self-sufficient in its goal of promoting smooth transportation.
- Supplementary industries such as component and battery suppliers as well as chemical firms and EV charging stations will all benefit from this trend and growth.
- As a result, there is a significant potential for monetary gain associated with this truly revolutionary shift toward electric mobility.
- Mutual funds that invest in electric vehicle (EV) stocks are also the gate for investors to capitalize on this cultural shift and turn a profit.
Conclusion
Domestic mutual funds and other investors are hoping to profit from this rapid rise in the value of the stock market.
In light of this expansion, the market is likely to experience significant development in the days and years ahead.
Investors who are looking for a risk-free way to get into the electric vehicle (EV) stock market may want to consider invest in EV Mutual Funds.
Investors have a lot of options with these mutual funds. Among the many mutual funds that invest in EV stocks (Which you can by reading different reports and articles published on reputed sites), investors should study and examine the stocks as per their risk appetite and budget. We hope you like this article. Keep reading keep supporting!