Electric vehicles are the next big revolution waiting to happen and the wheels have already started turning. A new report sheds light on how quickly India is adopting electric vehicles and what is expected of the sector in the coming years.
A report named ‘Electric Mobility In Full Gear’ has been published by Colliers. It highlights the growth of EVs in India and the possible trajectory of the segment, influenced by factors such as climate change and the growing consumer interest.
The report claims that India saw a record-high increase in the adoption of e-vehicles. The growth has been attributed to the government’s push for an EV ecosystem. According to the research, India witnessed a record-high increase in e-vehicles sales as the numbers tripled to 1.18 lakh units in H1 FY22 YOY.
Furthermore, the growing climate-conscious sentiment amongst the consumers and a recent spurt in domestic EV manufacturing have led to a sudden surge in sales. The government is also pushing on with incentives such as FAME-II to achieve its 2030 target of 30% new EV sales in the country.
This will also open up opportunities in the real estate sector spanning several other segments. The report estimates that there will be over 1,300 acres of land requirement pan-India to set up 110 GWh battery manufacturing capacity by 2030. EV charging infrastructure market is likely to grow at 40% CAGR till 2025 (as per Niti Aayog). Colliers estimates that India will need about 26,800 public charging spots by 2025. This can translate to a space requirement of about 13.5 msf (1.2 mn sqm) of charging area by 2025.
According to Colliers report, over the next five years, the EV space in India is likely to see investments of Rs 94,000 crore ($12.6 billion) across the value chain. At the recently concluded CoP26 summit, India pledged to reach net-zero carbon emissions by 2070. In India, the transport sector is currently the third-largest emitter of CO2.
The report highlighted that the process of EV adoption began in the year 2013 when the Central Government initiated a broad level policy through National Electric Mobility Mission Plan (NEMMP). Over the years, the government has formulated Faster adoption and manufacturing of (Hybrid &) Electric Vehicles (FAME) policies under the NEMMP, to provide demand and supply incentives.
States like Delhi, Gujarat, Maharashtra and Meghalaya are focusing on demand incentives, whereas Karnataka, Tamil Nadu, Andhra Pradesh, Telangana are focusing on manufacturer-based incentives. We believe a balanced mix of incentives at both ends should help to create a robust ecosystem for EVs. Battery manufacturing companies will be benefited by setting up bases in states with incentives such as getting land at concessional rates such as Andhra Pradesh and Tamil Nadu. Electricity charges and capital subsidies are also critical
States like Maharashtra, Delhi, and Gujarat having strong demand-side incentives should have provisions to set up industrial parks/clusters for EV or manufacturing of ancillary components with plug-and-play.
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