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EV sector likely to see Rs 94,000-crore investments in next 5 years: Report

EV 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.

New Tata Nexon EV Dark (Image for representational purposes)

The electric vehicle (EV) segment in the country is likely to witness investments of $12.6 billion, or Rs 94,000 crore, across the automotive value chain, over the next five years. Tamil Nadu is the frontrunner, accounting for about 34% share in total planned investments for EVs, followed by Andhra Pradesh and Haryana, with a share of 12% and 9%, respectively, according to a joint report by Colliers and Indospace.

The investments are likely to benefit the real estate sector in the form of setting up of 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, among others.

According to information available, apart from Ola Electric and Ather Energy, which already put up plants in Tamil Nadu, TVS Motor Company, Tube Investments of India, Simple Energy, Booma Innovative Transport Solution, Magenta EV Solutions, Zion International and Propel Industries were among the slew of companies that had recently signed MoUs with the state government to set up EV or EV component manufacturing facilities.

Colliers, a leading commercial real estate brokerage professional services and investment management company for landlords, tenants, and investors, said that currently, 15 states have either approved or notified EV policies, with 6 more states in the draft stage. States like Delhi, Gujarat, Maharashtra, and Meghalaya are focusing on demand incentives, whereas southern states and Uttar Pradesh are focusing on manufacturer-based incentives.

States like Maharashtra, Delhi and Gujarat, with strong demand-side incentives, should have provisions to set up industrial parks/clusters for EV or manufacturing of ancillary components with plug-and-play.

Ramesh Nair, CEO, India & MD,  market development, Asia, Colliers, said: “Government’s target of 30% electric vehicle sales by 2030 is an ambitious, but an achievable goal. In India, the transport sector is currently the third largest emitter of CO2. So, EVs can be a game changer. 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 requirement of about 1,300 acres of land pan-India.”

Colliers estimates that India will need about 26,800 public charging spots by 2025, requiring space of about 13.5 million sq ft. 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, it said.

The government is also encouraging automobile manufacturers to ramp up local production of EVs to reduce the country’s dependence on crude oil imports and curb vehicular pollution.  However, the government needs 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 park that provides plug and play facilities, developing and retrofitting warehouses for storing lithium-ion batteries, Colliers added.

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