Around USD 40 billion of investments are envisaged over the next 5-6 years for the development of Electric Vehicles (EV) & ancillary industries in India. However, the deployment of these funds will rely upon successful implementation of government policies, charging infrastructure ramp-up and domestic manufacturing capacity scale-up.
As per Colliers’ latest report, about two-thirds of the planned investments, can potentially materialize in the lithium-ion battery segment alone. Interestingly, despite slower than anticipated EV adoption, investment commitments in the EV industry rose over 3X times in the last 3 years. This in itself is a testament to the immense potential, which electric mobility holds in the country.
The planned investments can potentially open up multiple real estate opportunities. It would accelerate land acquisition for setting up of EV and Original Equipment (OE) manufacturing units including lithium-ion batteries. At the same time, with an uptick in EV adoption, increasing need for charging infrastructure would potentially translate into real estate demand for more than 45 million sq ft by 2030.
With an overall EV penetration rate of 8% in India, Colliers estimates sales of around 2 million EVs in 2024. Although the pace of EV adoption in the country has been commendable, it has not been as brisk as anticipated. Given the tardy progress, especially when compared with the ambitious desire of having 80 million EVs on road by 2030, attainment of set targets looks far-fetched. Although a 6x growth in average annual EV sales (2025-30) is highly optimistic, an eventual realization of EV goals necessitates concentrated efforts in overhauling the EV landscape of the country.
Factors such as significantly higher EV prices (compared to Internal Combustion Engine vehicles), import dependencies and inadequate public charging infrastructure have limited the EV adoption in the country. Thus, in addition to continued government impetus through subsidies and incentives, it becomes highly critical to significantly improve domestic EV manufacturing capabilities. Moreover, it is imperative to focus on lithium-ion battery & ancillary segments and public private partnerships in augmentation of charging infrastructure on highways, expressways and urban agglomerations across the country.
With the rise in domestic production of EVs, about 13,000 acres of land acquisition and development plans can potentially materialize by 2030. Of the potential land development opportunities, more than 80% is likely to come from lithium-ion battery manufacturers.
This will provide a significant boost to the EV industry in the country and open multiple real estate opportunities. With growing demand, the industrial and warehousing segment is likely to benefit the most. The segment is likely to witness surge in built-to-suit developments curated for both global and domestic EV manufacturing firms. Technology adept warehouses and automation is likely to become more pervasive and accentuate integration across the EV value chain in India.
