EV segment in India to attract $12.6 bn investment over next 5 years: Colliers

Hyderabad: The Electric Vehicles (EVs) segment in India is likely to witness investments of $12.6 billion (Rs 94,000 crore) across the automotive value chain, over the next five years, according to Colliers.

The investments are likely to benefit the Indian real estate sector in the form of setting up new or augmenting manufacturing units, industrial parks, and clusters with focus on last mile delivery by e-commerce firms and 3PL companies, government push for electrification of public transport, tax benefits and incentives for first time buyers amongst others. 

Currently, 15 Indian States have either approved or notified EV policies, with six more states in the draft stage.

“Real estate players can tap into the opportunity for manufacturing, warehousing, charging stations and dealerships of EVs. The government has a conservative scenario of manufacturing 110 GWh of EV batteries by 2030. This can spawn manufacturing requirements of about 1,300 acres of land pan-India,” said Ramesh Nair, CEO, India & MD, Market Development, Asia, Colliers.

13.5 mn sq ft needed for charging spots

Colliers estimates that India will need about 26,800 public charging spots by 2025, requiring space of about 13.5 mn sq ft (1.2 mn sq m). 

Landlords can outsource dedicated charging stations to charging service providers at busy locations. They can also enter into a revenue share model with charging service providers. There is also ample scope for developers to develop retail and recreation spaces in proximity to charging stations. 

Policies of Delhi, Gujarat and Maharashtra focus heavily on demand incentives, whereas southern states of Telangana, Andhra Pradesh, Tamil Nadu and Karnataka are focusing on manufacturer-based incentives.

“Overall, investments in original equipment manufacturing account for 64 per cent share, with the remaining investments in battery manufacturing. Companies are also exploring ways to set up large facilities such as giga-factories, to manufacture components for EV,” said Shyam Arumugam, MD, Industrial and Logistics Services, Colliers India.

Support needed for investment scale-up 

There is a need to reduce the number of permits specially required for EV manufacturing set-up and provide specific tax concessions to the private sector for charging infrastructure in their premises for investments to scale in the EV segment. 

Further, there is a need to establish dedicated EV parks that provide plug and play facilities, developing and retrofitting warehouses for storing lithium-ion batteries.