India’s electric vehicle (EV) sector is on the cusp of a transformative shift, with an estimated USD 40 billion in investments poised to fuel the growth of EV and ancillary industries over the next 5-6 years. These investments are expected to open up significant real estate opportunities, including land development, charging infrastructure, and specialized industrial spaces. Despite the slow pace of EV adoption, the future remains promising, with both the government and private players committed to scaling the industry.
According to Colliers’ latest report, “EVs in India: Renewed Vigour in Electric Mobility,” about two-thirds of the planned investments will be channeled into the lithium-ion battery manufacturing sector, which plays a crucial role in supporting EV production. While EV adoption has been slower than expected, the steady rise in investment commitments—tripling in the last three years—highlights the growing confidence in India’s EV ecosystem.
Investment Landscape: A USD 40 Billion Opportunity
The EV industry in India is experiencing rapid growth, driven by both domestic and foreign players. Over the next 5-6 years, investments in the sector are expected to total around USD 40 billion. Notably, around 67% of these funds will be directed toward lithium-ion battery manufacturing, followed by 23% for Original Equipment (OE) and EV manufacturing. The remaining 10% will be spread across battery recycling and other ancillary services.
These investments are not just about the vehicles themselves but also encompass the full supply chain, including raw materials, charging infrastructure, and the production of key components. Real estate will play a critical role in accommodating these developments.
Investment Breakdown (USD Billions):
- Lithium-ion battery manufacturing: USD 27.0 billion (67%)
- OE and EV manufacturing: USD 9.0 billion (23%)
- Others (battery recycling, ancillaries): USD 4.0 billion (10%)
This robust investment portfolio is expected to catalyze significant real estate demand, particularly in land acquisition and the development of new manufacturing units, including those for batteries and vehicle assembly. As a result, the real estate sector is expected to see substantial growth, particularly in industrial and warehousing spaces.
Charging Infrastructure: A Boon for Real Estate
In parallel with manufacturing growth, the need for robust charging infrastructure is creating additional real estate demand. Colliers estimates that by 2030, India will require over 45 million square feet of real estate to support the expansion of public and private EV charging stations.
The demand for this infrastructure will be widespread, spanning urban agglomerations, highways, and expressways. As EV adoption picks up, the establishment of these charging stations will require significant investments in real estate, particularly in the commercial, retail, and industrial sectors. Developers will increasingly need to design charging stations into new and existing properties, offering a competitive edge to residential, commercial, and industrial developments.
Vimal Nadar, Senior Director and Head of Research at Colliers India, commented: “Over 45 million square feet of real estate will be required for building an extensive network of public charging stations over the next 5-6 years. Residential and commercial developers too are likely to integrate dedicated charging stations and parking spots for EVs within their projects, which will align with the growing needs of corporate occupiers and homebuyers.”
Real Estate Development Opportunities
The planned investment surge in EV manufacturing and charging infrastructure is expected to unlock about 13,000 acres of land for development by 2030. More than 80% of this land is likely to be dedicated to lithium-ion battery manufacturing plants, given their critical role in the EV value chain. This will have a ripple effect across the industrial and warehousing sectors, which will see an increase in demand for specialized built-to-suit developments.
Key Real Estate Implications:
- Industrial and Warehousing Segments: As more companies establish EV and battery manufacturing units, demand for specialized industrial spaces will grow. Technology-driven warehouses with automation and integration across the supply chain will become more common, boosting the industrial real estate market.
- Residential and Commercial Developments: In response to the growing need for EV charging infrastructure, residential and commercial developers are expected to incorporate dedicated charging points and parking spaces for EVs within their projects. This move will not only cater to future demand but also position developers as forward-thinking players in the market.
- Land Acquisition: With the increase in EV-related manufacturing and infrastructure projects, land acquisition for production units and charging stations will rise. This trend will particularly benefit areas with easy access to major highways, expressways, and urban hubs.
EV Adoption in India: The Road Ahead
India’s EV penetration rate currently stands at 8%, with an estimated 2 million EVs expected to be sold in 2024. While the growth trajectory has been positive, it has been slower than anticipated, particularly in comparison to the ambitious target of having 80 million EVs on the road by 2030. Colliers estimates that achieving this target will require a sixfold increase in annual EV sales from 2025 to 2030.
The challenges to achieving these ambitious goals are clear: higher EV prices compared to Internal Combustion Engine (ICE) vehicles, a reliance on imports for key components, and an underdeveloped public charging network. To overcome these barriers, continued government incentives, policy reforms, and substantial investments in manufacturing capabilities are essential.
“Although the demand for EVs has picked up in recent years, the target of achieving 30% penetration by 2030 looks like an uphill task. While demand and supply incentives will continue to play a pivotal role in faster adoption of EVs, a multifold increase in EV sales can be fast-tracked by reducing production costs and improving affordability with respect to EV price points,” said Badal Yagnik, CEO of Colliers India.
Conclusion
The rapid expansion of India’s electric vehicle ecosystem presents a significant opportunity for the country’s real estate market. From the development of industrial spaces for EV manufacturing and lithium-ion battery plants to the creation of millions of square feet of infrastructure for public charging stations, the next decade is set to reshape the Indian real estate landscape.
Real estate developers, particularly those focused on industrial, warehousing, and commercial sectors, are poised to benefit from this seismic shift. As EV adoption accelerates and India continues its journey toward greener mobility, real estate will be at the heart of this transformation, offering both challenges and tremendous growth prospects.
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