Here Are Some Big Takeaways From Colliers Report On EV Ecosystem In India

EV Ultimo Team


Here Are Some Big Takeaways From Colliers Report On EV Ecosystem In India

With the government’s push for faster adoption, e-vehicles sales have tripled year-on-year to 1.18 lakh units in H1 FY22 on the back of fiscal incentives such as FAME-II, aimed at achieving the government’s 2030 target of 30% EV sales. The Electric Vehicles (EVs) segment in India is likely to see investments to the tune of USD 12.6 billion (Rs 94,000 crore) across the automotive value chain, over the next five years, according to a report by consultancy firm Colliers. 

Here are some big takeaways from their report-

The report titled ‘Electric Mobility in Full Gear’ says, the transport sector is the third-largest emitter of CO2. So, EVs can be a game-changer for multiple sectors, ranging from retail to recreation. Real estate players can tap into the prospect for manufacturing, warehousing, charging stations, and dealerships of EVs.

“The government has a conservative scenario of manufacturing batteries by 2030 but this can spawn a manufacturing requirement of about 1,300 acres of land pan-India,” says the report.

Tamil Nadu, which is setting up a dedicated EV park at Manalur near Chennai, has been able to corner the highest share of investments at 34%, followed by Andhra Pradesh and Haryana with a share of 12 percent and 9 percent respectively. 

A chunk (64%) of the investments in TN, India will be from OEMs, while the remaining capital would be for lithium-ion battery manufacturing.

Collier estimates the country will require about 26,800 public charging spots by 2025, requiring space of about 13.5 mn sq ft. Landlords can outsource dedicated charging stations to charging service providers at busy locations and can also enter into a revenue share model with charging service providers.

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

TN’s pole position in the EV transition is not surprising as the state has always had a strong auto manufacturing ecosystem accounting for 30% of the country’s auto industry base and 35% of the auto component sector. The state is home to domestic manufacturers, including biggies Royal Enfield, Ashok Leyland, and TVS Motor. Major new-age manufacturers investing in the EV space in TN include Ola Electric (₹2,354 crore), TVS Electric (₹1,200 crore), Ather Energy (₹635 crore), Srivaru Motors (₹1,000 crore), Ampere Vehicles (₹700 crore), Simple Energy (₹350 crore), Magenta (₹250 crore) and Zeon Charging (₹250 crore).

Battery manufacturing companies are also looking to set up bases in states where lands are being given at concessional rates such as Andhra Pradesh and Tamil Nadu. 

According to the report, around 13.5 million square feet would be needed for setting up 26,800 public charging spots by 2025. However, for setting up battery manufacturing units, electricity charges and capital subsidies will be critical as a drought of research and development for new battery technologies saw the country import ₹6,600 crore ($929 million) worth of lithium-ion batteries in FY20.

To achieve the grand investment target, ease of business remains the stumbling block in India as even today multiple construction permits take about three months, leading to higher approval costs. Besides, the lack of high-specification Grade A warehouses for storing lithium-ion batteries and high land cost in urban centers for public charging stations are the other challenges, points out the report.