Tamil Nadu top EV investment gainer
The electric vehicle (EV) segment is likely to witness investments of $12.6 billion, or Rs 94,000 crore, across the automotive value chain, over the next five years, with Tamil Nadu being a frontrunner. The country will also need about 26,800 public charging spots by 2025, requiring space of about 13.5 million square feet.
Tamil Nadu accounts for about 34 per cent share in total planned investments for EV, followed by Andhra Pradesh and Haryana with shares of 12 per cent and 9 per cent, respectively, according to investment management firm Colliers.
Currently, 15 Indian states have either approved or notified EV policies, with six 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.
The $12.6 billion investments in the sector are likely to benefit different sectors. The real estate sector stands to benefit by setting up manufacturing units, industrial parks and clusters with a focus on last mile delivery by ecommerce firms and third-party logistics companies. There would also be a government push for electrification of public transport, tax benefits and incentives for first time buyers amongst others.
According to transaction advisory firm RBSA Advisors, collective investment done by two-wheeler, three-wheeler, four-wheeler, EV component makers and last mile delivery companies was around Rs 25,000 crore during January-July 2021.
India will also need about 26,800 public charging spots by 2025, requiring space of about 13.5 million sq ft. This will help landlords to outsource dedicated charging stations to charging service providers at busy locations. They can also enter into a revenue share model with charging service providers.
“The government’s target of 30 per cent electric vehicle sales by 2030 is an ambitious, but achievable goal…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, chief executive officer, India & managing director, market development, Asia, Colliers.
According to RBSA Advisors, the Indian EV market is expected to reach a size of more than
$150 billion by 2030. The country’s EV market is currently in its infancy and is estimated to grow by 90 per cent from 2021 to
2030. In terms of penetration, EV sales accounted for barely 1.3 per cent of total vehicle sales in India in 2020-21.