Ola Electric, JBM Auto, Olectra vroom as govt launches PM E-drive scheme

The recently launched PM E-drive scheme will be valid for two years with a total outlay of Rs 10,900 crore, compared to FAME-2's budget of Rs 12,000 crore

Shares of electric vehicle manufacturers gained over 8.2 per cent on Thursday, September 12, after the government launched the PM E-drive scheme, to replace the FAME-2 scheme that was launched to promote the adoption of electric vehicles in the country.

The PM E-drive and the earlier FAME-2 schemes provide incentives for buyers of electric vehicles.

The PM E-drive scheme will be valid for two years with a total outlay of Rs 10,900 crore, compared to an outlay of Rs 12,000 crore under the FAME-2 scheme. READ MORE

At around 9:37 AM, shares of Ola Electric were up 0.75 per cent, Olectra Greentech shares were up 2.57 per cent and JBM Auto was up 5.29 per cent. In comparison, the BSE Sensex was up 345.55 points at 81,868.71.

Why are Ola Electric Mobility, Olectra Greentech and JBM Auto making a buzz on D Street?

As per the scheme, a total of Rs 3,679.99 crore is earmarked for electric two-wheelers (e-2W), electric three-wheelers (e-3W), e-ambulances, e-trucks (a new category that has been included), and other emerging electric vehicles (EV). 

The PM E-drive scheme is expected to support 2.48 million e-2Ws and 31,60,00 e-3Ws. Further, about Rs 4,390 crore is earmarked for the procurement of 14,000 e-buses by state transport units (STU) and public transport agencies.

The government has also approved an outlay of Rs 3,435 crore for the e-Bus Sewa payment security mechanism (PSM), to acquire and operate 38,000 e-buses by public transport authorities (PTA). This scheme will support the deployment of e-buses from FY25 to FY29.

Additionally, the government has specifically allocated Rs 2,000 crore for the installation of public EV charging stations (EVPCS). It proposes to install 22,100, 1,800 and 48,400 fast chargers for e-PVs, e-buses, e-2W and e-3Ws, respectively.

As per Motilal Oswal, this will help to sustain the momentum of EV transition in 2Ws and this is a positive for pure-play EV names like Ola Electric, Ather Energy and Greaves Electric.

Moreover, the fact that it has also included a fund for a payment security mechanism, highlights the government’s focus to facilitate EV transition in buses. This is positive for pure-play e-bus players like JBM Auto and Olectra Greentech, the brokerage firm stated.

In the past one year, shares of Ola Electric Mobility have gained 23.9 per cent, while Olectra Greentech has advanced 35.07 per cent and JBM Auto has given a return of 33.2, compared to the BSE Sensex's rise of 21.2 per cent during the same period.