EV MANUFACTURING A NEW OPPORTUNITY FOR REALTY SECTOR
The Electric Vehicle (EV) industry in India is the newest brainchild in the manufacturing sector, seeing a steady rise due to its appeal as a sustainable alternative. In January 2023, India surpassed Japan to become the third largest auto market globally by auto sales. The Indian EV market too is expected to grow at a CAGR of 90% to touch USD 150 billion by 2030. The government has given a strong push for the industry as new regulations are encouraging wider EV adoption. The strong push for sustainability and reduced carbon emissions is resulting in a remarkable upswing in EV manufacturing. In fact, the sector has attracted equity inflows from FDI of USD 34.7 billion during from April 2000 to March 2023. The surge in EV production brings several opportunities for many industries, including Indian real estate. The growth of EV manufacturing in India and its potential implications in the real estate sector include: Government support - PLI and its impact Production-Linked Incentive (PLI) in the automobile and auto components sectors had an outlay of USD 3.5 billion as financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Out of 115 applications to avail PLI benefits of the sector, a total of 85 applicants have been approved. The PLI schemes in this sector have been successful in attracting a proposed investment of INR 67,690 crore against the target estimate investment of INR 42,500 crore over a five-year period. Apart from Indian business groups, approved applicants for the Champion OEM Incentive Scheme includes groups from countries such as Republic of Korea, USA, Japan, France, Italy, UK, and the Netherlands. Investments in EV manufacturing facilities Domestic and international vehicle manufacturers are investing heavily in manufacturing facilities across India to meet the growing demand. While popular automakers like Tata Motors, Mahindra Electric, and Hyundai are expanding their production capabilities in existing and new manufacturing units, the arrival of companies like Tesla have strengthened the ‘Make in India’ initiative and raised demand for more space. This surge in demand for space and investment has opened new avenues for property consultants in terms of location planning, facility planning and even lease negotiations. Demand for specialised infrastructure The rising demand for EVs means an increasing requirement for specialised infrastructure to support production processes. This includes advanced charging stations, battery assembly facilities, and testing laboratories. The real estate sector needs to cater to these specialised requirements. That’s where property consultants come in. Real estate consultants can help identify the right locations to set up these facilities, which ensuring that they are located close to key markets, have access to transportation networks and a skilled talent pool. Complementary facilities For EV manufacturers to produce vehicles seamlessly, they also need a stable ecosystem of component suppliers in a close range. There are many real estate opportunities in helping component suppliers like battery manufacturers, charging infrastructure providers, and other ancillary industries to establish set-ups close to EV manufacturing units. In this process, real estate consultants can facilitate efficient supply chain management and meet the rising demand for EV components. Redevelopment of industrial spaces India's evolving EV landscape calls for the repurposing and redevelopment of existing industrial spaces. Traditional manufacturing facilities, particularly those associated with the internal combustion engine industry, may need to be transformed into spaces that support the production and assembly of electric vehicles. Property consultants can offer their expertise in conceptualising and executing these industrial redevelopments, enabling a smooth transition. Multi-use development opportunities The growth of EV manufacturing creates opportunities for multi-use developments that integrate manufacturing facilities, research and development centres, and showroom spaces. Real estate consultants can assist in designing and implementing these mixed-use developments, aligning them with the needs and objectives of EV manufacturers while optimising the usage of available land. In India, an aggressive target of reaching 30% electric vehicle penetration by 2030 has been set, indicating a conscious shift towards clean mobility solutions. This, complemented by the government's incentives and regulations, like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, have resulted in a significant growth in the EV manufacturing sector in recent years. And this is anticipated to grow. The growing attention on electric vehicle manufacturing in India brings along several opportunities for the real estate sector. From providing specialised infrastructure, modernising manufacturing units to creating effective clusters and a seamless supply chain, effective real estate solutions are pivotal to the expansion and transformation of the EV manufacturing industry. New and innovative ways of real estate entries like leased factories and lease to buy factories are getting popular day by day and they offer faster and seamless implementation. Property consultants are lifting their share in this transformation too. It is their knowledge and expertise in situation analyses, site selection, research, lease negotiation, construction and property management that will help the sector gain and contribute to the country's sustainable future.
Tags : EV manufacturing opportunity realty sector Yogesh Shevade Head- Logistics & Industrial India JLL growth multi-use developments real estate Electric Vehicle (EV) industry India sustainable Japan auto sales government regulations carbon emissions