Exploring the Potential of Electric Vehicles Franchises in India


Starting an electric vehicles franchise in India is a promising business opportunity in the evolving electric vehicle industry. The demand for electric scooters, e-bikes, and electric cars is on the rise, making it a lucrative venture. 

In this blog, we will guide you on how to start an EV franchise in 2023, covering the requirements, documents needed, space, profit margins, frequently asked questions, marketing strategies and more.

Contents

Ins & Outs of an Electric Vehicles Franchise

Setting Up an Electric Vehicles Franchise in India

The demand for next-generation electric vehicles, including electric scooters, e-bikes, and electric cars, is driving the expansion of the electric vehicles franchise and dealership business in India. The EV industry is expected to generate significant revenue due to strong consumer demand and innovative solutions to lower the cost of EVs across the country.

Before opening an electric vehicle franchise, you must decide whether you want to deal in two-wheelers, three-wheelers, or four-wheelers. Here’s how to get started.

Also Read – Need Electric Scooter License In India 2023 – Everything You Should Know!

Two-wheeler Electric Vehicles Franchise in India

Documents Required for EV Franchise

To initiate your EV franchise, specific documents are crucial for a smooth process:

  • EV franchise license
  • EV business registration (Sole Proprietorship/Private Limited/LLP)
  • Trade License from the local administration
  • State Board’s Shop & Establishment Registration
  • GST registration
  • IT Returns – to check your financial history
  • Legal ownership of the land or lease agreements
  • Business Insurance

Government Formalities

Embarking on the journey of setting up a dealership involves navigating through various government formalities. Here’s a step-by-step guide to understand the govt. pre-requisites:

1. Application Form Submission:

   – Begin by filling out the required application forms for establishing your dealership.

2. Surety Bond Procurement:

   – Depending on your business type, secure the necessary surety bonds. The number required varies based on your specific line of business.

3. Vehicle Liability Insurance:

   – Ensure your vehicles are covered with liability insurance to meet legal requirements.

4. GST Tax Number Application:

   – Apply for a Goods and Services Tax (GST) number, a crucial step for regulatory compliance.

5. Business Location Development:

   – Develop and finalize your business location, adhering to local zoning regulations and business establishment guidelines.

6. Regulatory Compliance for Photographs and Signage:

   – Regularize photographs of your dealership and ensure your business sign complies with state-specific photo and signage regulations.

7. Fee Payment:

   – Fulfill your regulatory obligations by paying the mandated fees associated with establishing and operating your dealership.

8. Dealer’s Tag Acquisition:

   – Receive your dealer’s tag from the courthouse, a significant step in legitimizing your dealership operations.

9. Sales License Application:

   – Obtain the necessary sales license that allows you to legally sell vehicles from your dealership.

Navigating through these government formalities systematically ensures a smooth and lawful establishment of your dealership business. 

Approaching the Brands Offering Franchise

Trying to establish your EV dealership involves reaching out to brands that offer franchise opportunities. Follow these steps:

  1. Research: Identify both established and emerging brands in the EV market.
  2. Visit the Website: Explore the official website of your chosen brand.
  3. Franchise Section: Look for a dedicated franchise section on the brand’s website.
  4. Application Form: Fill out the franchise form with accurate and relevant information.
  5. Submission: Submit the completed franchise application through the specified channel.
  6. Communication: Await further communication and instructions from the brand regarding the franchise process.

Investment/ profits sources and estimated margin

Within the realm of electric vehicle business opportunities, we embark on a comprehensive journey encompassing the following key aspects:

Revenue Sources for Electric Bike Showrooms

A careful look at the different ways electric scooter franchises can make money, including selling electric scooters, providing spare parts, offering services and repairs, earning commissions from insurance and finance companies, and getting helpful marketing support from manufacturers.

Investment in EV Dealerships

A strategic analysis of investing in electric vehicle franchises, considering factors like choosing the right brand. Explore opportunities from both well-known and new EV manufacturers, highlighting the importance of wise financial management in handling various operational costs.

Profit Margins for EV Dealerships in India

Profit margins for electric vehicles franchises can vary based on the brand’s reputation. Well-established brands may offer standard profit margins, while emerging electric scooter manufacturers in India may provide higher margins per unit. On average, you can expect to make between 3% and 7% per unit, with an additional 1% instant rebate for advance payments. The majority of profit comes from maintenance and spare parts, accounting for around 20-40% of the revenue.

Electric Car Franchise in India

Setting up an electric vehicle (EV) dealership involves meeting certain general requirements to ensure a smooth establishment and operation.

Documents Required

To kickstart your EV car dealership, gather the necessary documents for legal compliance and seamless operations:

  • EV franchise license
  • EV business registration (Sole Proprietorship/Private Limited/LLP)
  • Trade License from the local administration
  • State Board’s Shop & Establishment Registration
  • GST registration
  • IT Returns – to check your financial history
  • Legal ownership of the land or lease agreements
  • Business Insurance

Government Formalities

Embarking on the journey of setting up a dealership involves navigating through various government formalities. Here’s a step-by-step guide to understand the govt. pre-requisites:

1. Application Form Submission:

   – Begin by filling out the required application forms for establishing your dealership.

2. Surety Bond Procurement:

   – Depending on your business type, secure the necessary surety bonds. The number required varies based on your specific line of business.

3. Vehicle Liability Insurance:

   – Ensure your vehicles are covered with liability insurance to meet legal requirements.

4. GST Tax Number Application:

   – Apply for a Goods and Services Tax (GST) number, a crucial step for regulatory compliance.

5. Business Location Development:

   – Develop and finalize your business location, adhering to local zoning regulations and business establishment guidelines.

6. Regulatory Compliance for Photographs and Signage:

   – Regularize photographs of your dealership and ensure your business sign complies with state-specific photo and signage regulations.

7. Fee Payment:

   – Fulfill your regulatory obligations by paying the mandated fees associated with establishing and operating your dealership.

8. Dealer’s Tag Acquisition:

   – Receive your dealer’s tag from the courthouse, a significant step in legitimizing your dealership operations.

9. Sales License Application:

   – Obtain the necessary sales license that allows you to legally sell vehicles from your dealership.

Navigating through these government formalities systematically ensures a smooth and lawful establishment of your dealership business. 

Approaching the Brands Offering Franchise

Initiate your EV dealership by strategically approaching brands that offer franchise opportunities:

  1. Research: Identify established and emerging brands in the EV market.
  2. Website Visit: Explore the official website of your chosen brand.
  3. Franchise Section: Look for a dedicated franchise section on the brand’s website.
  4. Application Form: Complete the franchise application with accurate information.
  5. Submission: Submit the franchise application through the specified channel.
  6. Communication: Await further instructions from the brand regarding the franchise process.

Investment/Profits Sources and Estimated Margin

Establishing an electric vehicle (EV) dealership demands a thoughtful investment strategy and careful consideration of profit sources. The initial investment, typically ranging from 30 lakhs to 50 lakhs of rupees, is influenced by factors such as location, state-specific taxes, and advertising budget. This investment encompasses setup and operational expenses crucial for the dealership’s functioning. The profit margin is intricately tied to the brand reputation, with well-known brands offering standard profit margins. On the other hand, emerging manufacturers may present higher profit margins per unit. The recognition of the brand holds a pivotal role in determining the overall profit potential for the dealership.

3 Wheeler EV Franchise in India

In the evolving landscape of India’s electric vehicle market, the demand for 3-wheeler EV franchises mirrors the robust requirements seen in 2 and 4-wheelers & with a compelling compound annual growth rate of 22.5%, this sector is poised to reach USD 1.5 billion by 2025. 

The surge is fueled by government incentives promoting sustainable transport, making it an opportune moment to explore the 3-wheeler EV arena. Entrepreneurs looking to capitalize on this burgeoning market can navigate the landscape by acquiring requisite licenses, adhering to governmental formalities, and strategically partnering with reputable brands offering 3-wheeler EV franchises. Beyond aligning with environmental goals, this sector promises a dynamic avenue for business growth and sustainability.

Pros and Cons of an Electric Vehicles Franchise

Pros Cons
Good returns on investment Inability to build your own brand
First-hand knowledge of products Dependence on business efficacy for revenue
Low initial investment Competition with many brands in the market
Opportunity to operate with a small inventory Possible profit sharing with the main distributor

Marketing Strategies for Electric Vehicles Franchise in India

While the brand often handles marketing, you can launch a user-friendly website that vividly showcases your EV showroom, spotlighting exclusive deals, discounts, cutting-edge accessories, and premier services. Harness the reach of online business directories like Google My Business and Justdial to enhance visibility—list accurate location details, contact information, and operating hours.

Set your dealership apart by featuring compelling online deals and limited-time discounts on the website, enticing eco-conscious customers. The website should include a comprehensive catalog of EV accessories, creating an interactive shopping experience.

Prominently display your showroom’s commitment to sustainability, emphasizing the environmental benefits of EVs. Leverage social media channels to engage and inform your audience about the latest EV trends, special promotions, and customer testimonials.

Most significant EV manufacturers in India offer dealership opportunities, catering to both urban and rural areas. Some prominent names include Hero Electric, AMO Electric Bikes, Greaves, Pure EV, Okinawa, Evolet, Bajaj, and Okaya.

Conclusion

Starting an electric vehicles franchise in India requires thorough preparation and an understanding of the market. By following the steps and guidelines provided, you can embark on a successful journey in the electric vehicle industry. You need to understand, study and act upon the opportunities offered by various brands and work towards establishing a thriving electric vehicles franchise in 2023.

Venturing into the world of electric vehicles as an entrepreneur in India offers a promising path for those with a passion for sustainable mobility. As the demand for electric vehicles continues to surge, establishing an electric vehicles franchise can be a lucrative and forward-thinking endeavor. From fulfilling the prerequisites to understanding the space requirements, choosing the right brand, and grasping the profit margins, it’s evident that the journey to starting an electric vehicles franchise is both exciting and full of potential.

FAQs

1. Is EV two wheeler dealership profitable?

Commencing an EV dealership at this juncture proves to be exceptionally lucrative, especially with the relentless surge in petrol prices. Moreover, there is a growing fatigue among individuals with conventional heavy bikes and scooters. This creates a prime opportunity for electric bikes and e-scooters, offering riders enhanced comfort and efficiency in this evolving landscape..

2. How can I get an electric car dealership in India?

The initial investments for setting up the infrastructure of this project include a land lease cost of Rs. 50,000 per month, amounting to Rs. 6,00,000 annually. Additionally, there is an expenditure of Rs. 7,50,000 for electricity transformers, connections, and energy meters, ensuring the efficient functioning of the facility. To provide a solid foundation for operations, a budget of Rs. 2,50,000 has been allocated for civil works. Lastly, maintaining a skilled and dedicated technical team comes at a cost of Rs. 3,00,000, contributing to the overall setup and success of the project.

3. How to get an electric station franchise?

Establishing an electric station franchise requires a multitude of factors. From eligibility criterias to documentation and more. 

4. What is the profit margin of an EV dealership?

The electric vehicle (EV) sector in India is experiencing remarkable growth, and investing in an OLA electric scooter dealership proves to be a lucrative opportunity. As a dealership owner, you can anticipate initial challenges while enjoying substantial returns, earning up to 25% of the sales value. Success in this venture may require multitasking and dedicated efforts, but the potential rewards make it a compelling and profitable endeavor.

5. Which EV stock is best in India?

The top three EV stocks include Reliance Industries Ltd, Maruti Suzuki India Ltd, and NTPC Ltd. Please note that this list is provided for educational purposes and is not intended as a recommendation.


Also Read

EV Guide 101 On Establishing An EV Charging Station In India



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