Tata Power eyes growth in the home EV charging segment that gives 'better margin'
Speaking to CNBC-TV18, Praveer Sinha, MD & CEO of Tata Power explained, "Home charging is where we make a good margin because it's on a cost-plus basis that we do, and for providing the EV charger as well as the services, there is a fee that we charge." This cost-plus model, which incorporates both the hardware (EV chargers) and the accompanying services, ensures a sustainable profit margin for Tata Power.
Tata Power has found a lucrative niche in the electric vehicle (EV) charging market through its home charging segment. The company's success in this area can be attributed to its cost-plus pricing strategy, coupled with service fees. This particular segment has become a cornerstone of profitability within Tata Power's EV charging business.
Praveer Sinha, the Managing Director and CEO of Tata Power, in an interview with CNBC-TV18, said that the company's strong margins in home charging are a result of their cost-plus pricing model. Under this model, Tata Power not only provides the EV chargers but also offers accompanying services for a fee. This comprehensive approach, which covers both the hardware and services, ensures a sustainable profit margin for the company.
Highlighting the significant growth potential in the home charging sector, Sinha said, "Currently, we have 50,000 home chargers, and we expect this number to grow substantially in the next five years." This expansion demonstrates Tata Power's commitment to meeting the increasing demand for home EV charging solutions.
However, it's important to note that home charging is just one of the three key components of EV charging. Sinha emphasised that EV charging encompasses three distinct segments - home charging, fleet charging, and public charging. While home charging has been a profitable venture for Tata Power, the company is also actively involved in fleet charging for commercial vehicles and public charging infrastructure to support a wide range of EV users.
“The only space where the returns have not come as yet is the public charging, which is not a very large component at present,” said Sinha.
The future of the EV industry in India appears promising, with Tata Power positioning itself as a significant player in the sector. As the nation continues its transition towards sustainable transportation, the growth of home charging and other EV charging segments is expected to play a pivotal role in facilitating the adoption of electric vehicles across the country. Tata Power's focus on profitability and its commitment to expanding its charging infrastructure underscores its dedication to supporting India's clean energy revolution.
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