JBM Auto, Olectra Greentech & other EV stocks rise as Centre approves ₹10,900 crore PM E-DRIVE scheme

Shares of companies involved in the manufacturing of electric vehicles (EVs) surged sharply on Thursday, September 12, after the Union Cabinet approved a new scheme to promote electric mobility in the country.

The Union Cabinet, at a meeting chaired by Prime Minister Narendra Modi on September 11, approved the implementation of a scheme titled ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme’ with an outlay of ₹10,900 crore over two years.

The scheme provides subsidies or demand incentives worth ₹3,679 crore to encourage the use of electric two-wheelers, three-wheelers, ambulances, trucks, and other emerging EVs. It also offers a sum of ₹4,391 crore for the procurement of 14,028 e-buses by state transport undertakings or public transport agencies.

After the announcement of the scheme, shares of electric bus manufacturers and auto component suppliers to EVs rallied on the back of a strong business outlook.

Shares of JBM Auto, one of the world’s leading manufacturers of key auto systems, electric vehicles and buses, jumped as much as 8.7% to hit the day’s high of ₹2,093.70 on the National Stock Exchange of India (NSE) on Thursday.

Olectra Greentech Ltd, India’s first electric bus manufacturer, also gained 5% to hit the day’s high of ₹1,699 apiece on the NSE.

Shares of Cosmo Ferrites, which is a leading manufacturer of soft ferrites that are used extensively in electric and hybrid vehicles, skyrocketed as much as 13% on the BSE to hit the day’s high of ₹247 apiece.

Semiconductor company Kaynes Technology, which manufactures chips used in a wide range of applications, including EVs, also zoomed as much as 12% to hit an intraday high of ₹5,325 apiece on the NSE.

The primary objective of the PM E-Drive scheme is to expedite the adoption of EVs by providing upfront incentives for their purchases and facilitating the establishment of essential charging infrastructure.

The scheme also addresses the range anxiety of EV buyers by promoting the installation of electric vehicle public charging stations (EVPCS). A sum of ₹2,000 crore will be allocated to install EVPCS in select cities with high EV penetration and also on select highways.