Maharashtra and Tamil Nadu top EV investments with USD 4.3 bn each during 2020-H1 2023

Four & two-wheeler electric vehicle manufacturing to drive pan India demand for 13 mn. sq. ft. of real estate by 2030

CBRE South Asia Pvt. Ltd.,India’s leading real estate consulting firm, today announced the findings of its report, Electric Vehicles in India – New Wheels on the Roads’. The report focuses on the trends, growth, and influence of electric vehicles (EVs) on the real estate sector in India.

According to the report, state governments are implementing several policy measures to encourage the establishment of a domestic EV manufacturing ecosystem, incentivizing investments from both global and domestic players. On a pan-India basis, total cumulative investment in EVs during the 2020-H1 2023 stood at USD 28.8 bn. Maharashtra and Tamil Nadu emerged as leaders in EV investments, each capturing a 15% share – equivalent to USD 4.3 bn. Further, Karnataka captured an 11% share, amounting to investments worth USD 3.2 bn; Gujarat attracted USD 2.3 bn with an 8% share of the total cumulative investment, while Uttar Pradesh and Telangana had a 7% share each.

Key investment announcements in the EV sector witnessed in Q1 2023 are mentioned below:

  • Maharashtra - Gogoro Belrise Industries announced an investment of about USD 2.5 bn for charging infrastructure manufacturing facility
  • Tamil Nadu - Ola Electric announced an investment of about USD 0.9 bn for a battery manufacturing facility
  • Uttar Pradesh - Tauschen E-mobility an announced investment of about USD 0.2 bn for an EV manufacturing facility

The report also mentioned that Maharashtra and Uttar Pradesh dominated investment announcements in the charging infrastructure manufacturing sector. Karnataka and Tamil Nadu collectively led planned investments related to research and development (R&D) activities for EVs. Karnataka, Maharashtra and Madhya Pradesh captured the highest share in EV equipment manufacturing investment announcements. Tamil Nadu, Maharashtra, and Haryana led EV manufacturing investments. A significant chunk of battery manufacturing investments were made in Karnataka, Tamil Nadu, and Telangana. Uttar Pradesh held the highest share in investments planned for EV fleet as service operations (EFaS).

According to the report, real estate requirement for manufacturing facilities of 4-Wheeler & 2-Wheeler (4W & 3W) EVs is estimated to be around ~ 13 million sq. ft. by 2030 as a result of the government's EV adoption targets. In addition, EV battery manufacturing facilities would also increase exponentially and require 2,400 acres of land to accommodate the production of 200 GWh of batteries by 2030. As per the report’s estimates, by 2030, this real estate requirement will allow a production capacity of approximately 4 million units of 4Ws and 23 million units of 2Ws. Built-to-suit (BTS) and leased facilities are largely preferred by EV manufacturers at present in India due to ease of capital deployment, flexibility in lease terms, speed to market and location advantages. However, an owned facility provides more scope for customization, save monthly rental outgoings, and has better prospects for land price appreciation.​

In the current year, the EV sector has recorded investment announcements of about USD 6.2 bn to date. The year 2022 witnessed strong traction, with global and domestic players announcing investments of over USD 17.1 bn in the EV industry, a Y-o-Y increase of about 287% compared to USD 4.43 b in 2021. In the same period, half of the investments were driven by EV component manufacturers.