Colliers reports ₹3.4 lakh crore Investment in EV industry, highlighting need for faster adoption

Domestic and foreign firms have announced a whopping ₹3.4 lakh crore investment in India's electrical vehicles (EVs) and ancillary industries over the next six years, Colliers India on Wednesday said while expressing concern over "tardy progress" towards achieving the goal of 30 per cent electric mobility by 2030

Real estate consultant Colliers India on Wednesday released a report 'EVs in India: Renewed Vigour in Electric Mobility', highlighting that an overall EV penetration rate in India stood at 8 per cent. It estimated sales of around 2 million (20 lakh) EVs in 2024.

"Although the pace of EV adoption in the country has been commendable, it has not been as brisk as anticipated," the consultant pointed out.

The report mentioned that individual companies across the EV landscape have announced plans to invest USD 40 billion ( ₹3,40,000 crore) in a phased manner till 2030. Out of this, USD 27 billion is planned for lithium-ion battery manufacturing and USD 9 billion for OE (Original Equipment) and EV manufacturing.

When asked about the investments made in India's EVs and ancillary industries so far, the consultant said the data was unavailable.

"The deployment of planned investments over the next 5-6 years can open up multiple real estate opportunities, especially in the industrial & warehousing sector. Investments can potentially accelerate land acquisition and expedite setting up of EV and OE manufacturing units including lithium-ion batteries," the report said.

Colliers India noted that India has set an ambitious target to achieve 30 per cent electric mobility with 80 million EVs on roads by 2030.

"However, despite steady growth in sales volumes and focused government efforts, the progress has been tepid till now," it said.

A current penetration rate of 8 per cent and total EV stock of just over 5 million, necessitates an exponential growth in EV adoption across categories over the next few years, the consultant said.

Interestingly, the report mentioned that EV adoption has been the highest in 3-wheelers (predominantly e-rickshaws used for last-mile public commute), where operational expense reduction offsets higher one-time expenses upon purchase of EV variants.

To expedite EV adoption in personal vehicles including 2 and 4-wheelers, further impetus on domestic manufacturing should help in eliminating fixed costs of EV purchase, the report suggested.

"Given the tardy progress and estimated 2 million annual EV sales in 2024, it is unlikely that we can witness an overall 6x growth in average annual sales from 2025-2030," Colliers said.

However, focused demand and supply side measures can result in slightly delayed and eventual completion of set targets, it hoped.

Apart from subsidies, tax incentives and domestic manufacturing impetus, the consultant said that quantum improvement in charging infrastructure can potentially drive EV sales across vehicle categories and expedite partial accomplishment of 2030 targets.

Moreover, a multifold increase in EV sale volumes can be fast-tracked by the narrowing of the price differential between EV and Internal Combustion Engine (ICE) variants (currently 20-50 per cent across 2,3 & 4-wheelers and heavy vehicles), the report said.

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