ev charging station business loan

Electric vehicles are the new buzzword and the market in India is growing steadily. The Electric vehicle market was USD $ 5 billion in 2020 and is expected to grow to the US $ 47 billion by 2021. The state of Kerala alone plans to launch 1 million electric vehicles by 2022 and 6000 e-buses by 2025.  The vehicles that are going electric are passenger cars, 2 wheelers and heavy-duty vehicles such as buses and trucks. The types of vehicles by charging type include plug-in hybrid electric vehicles, hybrid electric vehicles and battery electric vehicles.

The Indian government is pushing for green environment initiatives and has moved from Bharat Stage V (BSV) to BSVI standards is expected to boost the market for electric vehicles further. This exponential rise of electric vehicles has led to an increase in the requirement for charging stations. The business of setting up charging stations Is a lucrative new business. The business includes getting land as the charging station will need to accommodate at least a few vehicles and 2 wheelers on the basis of the type of vehicles for which the charging business is to be set. 

The location of the land is important as people would prefer to be in the vicinity of a shopping mall or a shopping complex or a locality of markets and restaurants so that they can shop and eat while their vehicles are being charged. A commercial area would also be a good idea as customers can attend office while their vehicles are being charged.  

The next requirement is for the type of equipment based on the type of charging to be done. There are fast chargers that charge the entire batteries of an electric vehicle within an hour and do a partial charge within a few hours. Fast chargers include CHadeMO chargers, CCS chargers, and type 2 AC chargers. The slow and moderate chargers include AC 001 and DC 001.

Setup costs

The cost estimation of the setup of the business has been tabulated below:

Item

Cost

CCS and CHadeMO charges

Rs 7.5 lakhs each

Type 2 AC Chargers

Rs 1.25 lakhs

Bharat DC 001 slow/ moderate charger

Rs 2.5 lakhs

Bharat AC 001 slow/ moderate charger

Rs 70000

Electricity connection (250 KVA with cables, meter, and transformer)

Rs 7 lakhs

Civil work including sheds for parking vehicles to be charged

Rs 3 lakhs

EVSE management software (allows customers to find and book a charging slot

Rs 50000 per annum

Salary of minimum 2 persons

Rs  5 lakhs annually

Land rent

Rs 150000 annually

Electricity cost

Rs 1.2 lakhs annually

This startup cost and recurring annual income may require an entrepreneur to apply for a business loan

There are companies within India that offer equipment and the opportunity to set up a charging station as a franchisee and also offer finance. 

We are an NBFC (nonbanking finance company) providing business loans for SMEs (Small and medium enterprises sector that includes the business of charging stations for electric vehicles.

How to apply for a business loan for an EV charging station

The terms and conditions for our business loans are as follows

  1. The business must have been in operation for at least 6 months till the time of application for the loan
  2. The interest is between 1 to 2 % per month.
  3. The tenure of the loan is 36 months and can be extended upto 4 years.
  4. The loan can be prepaid anytime after paying at least one EMI and there are no preclosure charges.
  5. The applicant needs to check his or her eligibility for the loan amount, interest and tenure and then fill up the downloaded application.
  6. The applicant needs to get the required documents ready as per the checklist and visit us. We will help the applicant fill thr form and offer our best services.
  7. The applicant can rest assured we will examine the loan application, do a thorough scrutiny of the documents and provide the best financing with the best interest rates.

Loan for EV Charging Station FAQs:

1. Does the business of making a charging station for electric vehicles also need to be registered?

Yes, the business of making a charging station also needs to be registered in order to be eligible for a loan.

2. Can a business loan for an electric vehicle charging station be given to a franchisee of a bigger group?

Yes. An electric vehicle charging station can be a franchisee of a bigger group and still be eligible for a business loan.

3. Can an EV charging station business in a rented shed be eligible for a business loan?

Yes. An EV charging station business can be started on rented land and still be given a loan.

4. How fast can an EV charging station business recover its investment?

An EV charging station with 3000KW capacity operating 12 hours a day can recover its costs within 2 years.

5. What is the maximum tenure for a loan taken for an EV charging station?

The maximum tenure for a business loan taken for a charging station is 3 years and can be extended to 4 years.

6. What is the criterion for the EV charging station business to be eligible for a business loan?

The performance criterion is for a minimum turnover of Rs 90000 in the three months before applying for a business loan for the business.

7. Is there any location constraint for an EV charging station business to apply for s business loan?

The location constraint is that the EV charging station business must not fall in a negative or in a restricted location. Applicants are requested to check the location details before selecting a location to start their business.

8. Can an EV charging station business get government aid and still be eligible for a business loan?

There is no restriction on an EV charging station business getting government aid still being eligible for a business loan. In fact, a business being eligible for government aid has better chances of getting a business loan on lower interest rates.

9. Can a loan taken for an EV charging station business be prepaid and are there any foreclosure charges?

A business loan taken for an EV charging station can be prepaid any time after one EMI has been paid and there are no foreclosure charges.

10. Does the property on which an EV charging station business has been started need to be given on mortgage for a business loan?

The business loan for an EV charging station does not need any collateral and no mortgage of property is required.