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The electric vehicles (EVs) segment in India is likely to witness investments of $12.6 billion across the automotive supply chain over the next five years.

A joint report by Indospace and Colliers titled “electric mobility in full gear” said 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 ecommerce firms and 3PL companies, government push for electrification of public transport, and tax benefits and incentives for first time buyers, amongst others. 

According to the report, Tamil Nadu is the frontrunner accounting for about 34 percent share in total planned investments for EV, followed by Andhra Pradesh and Haryana with a share of 12 percent and 9 percent, respectively. 

Currently, 15 Indian states have either approved or notified EV policies, with six more states in the draft stage.

“Government’s target of 30 percent 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,” said Ramesh Nair, Chief Executive Officer, India & Managing Director, Market Development, Asia, Colliers.

He noted that the government has a conservative scenario of manufacturing 110 GWh of EV batteries by 2030, which can spawn manufacturing requirement of about 1,300 acres of land pan-India.

Colliers estimates that India will need about 26,800 public charging spots by 2025, requiring space of about 13.5 million sq.ft. The report noted that 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 focussing on manufacturer-based incentives,” said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.

He noted that investments in original equipment manufacturing will account for 64 percent share, with the remaining investments in battery manufacturing.