Tamil Nadu tops with about 34% share in total planned investments for EV, says Colliers- Indospace study
GURUGRAM, Dec 18 (The CONNECT) – The Electric Vehicles (EVs) segment in India is likely to witness investments of USD12.6 billion or INR94,000 crore across the automotive value chain, over the next five years, a study says.
In its latest joint report with Indospace titled ‘Electric Mobility in Full Gear’, Colliers estimates that 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.
Tamil Nadu is the frontrunner accounting for about 34% share in total planned investments for EV, followed by Andhra Pradesh and Haryana with a share of 12% and 9% respectively.
Currently, 15 Indian 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 having strong demand side incentives should have provisions to set up industrial parks/clusters for EV or manufacturing of ancillary components with plug-and-play.
“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,” said Ramesh Nair, Chief Executive Officer, India & Managing Director, Market Development, Asia, Colliers.
About 13.5 million sq ft space required by 2025 for EV charging stations
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.
“State governments have initiated demand and supply-side incentives to boost the EV segment. Policies of Delhi, Gujarat and Maharashtra focus heavily on demand incentives, whereas southern states of Tamil Nadu, Karnataka, Andhra Pradesh and Telangana are focusing on manufacturer-based incentives. Overall, investments in original equipment manufacturing account for 64% 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, Managing Director, Industrial and Logistics Services, Colliers India.
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.
Vimal Nadar, Senior Director & Head of Research, Colliers India said, “India has also committed to become carbon neutral by 2070 which will entail meeting several milestones including reducing carbon emission per unit of GDP by 45%. Electrification of the transport sector is pivotal as it is the third major contributor of emissions. While the government has laid down a roadmap incentivizing key stakeholders in the automotive value chain, it is imperative to forge a strong alliance to establish an ecosystem to fuel the electrification of vehicular transport in the country.”
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.