Electr c mobility

in full gear

December 2021
 Electr c mobility in full gear

Foreword
The dialogue on sustainability and reversing climate change is an
important one. We are at a critical juncture, and our actions and
plans can go a long way to make the earth greener. Governments
and companies are forming targets and strategies to lower carbon
emissions. But now is the time to transform them into time-bound
actionables and outcomes.

According to the targets set by India at the COP26 summit, by

2030 the country pledges to reduce carbon emission per unit of
GDP by 45% and reach net-zero carbon emissions by 2070. In
India, the transport sector is the third largest emitter of CO2.
Given this, faster adoption of electric vehicles (EVs) can cut
down the need for fossil-fuel-run vehicles. India has already
made some strides. We have domestic companies who are
manufacturing EVs and are seeing success. We estimate that
over the next five years, the EV segment in India is likely to
see investments of INR94,000 crore (USD12.6 billion) across
the automotive value chain. But we have a long way to go
to transform the transport ecosystem in the country as
the EV adoption gains pace.

In this report, ‘Electric Mobility in Full Gear,’ we explore

various real estate opportunities arising from EVs,
across the plethora. This is a huge opportunity for the
real estate sector to partake in the sustainable
movement. A lot will depend on how policy incentives,
support infrastructure and investments materialize to
form a robust EV ecosystem in the country.

Ramesh Nair
Chief Executive Officer | India &
Managing Director, Market
Development | Asia | Colliers

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Electr c mobility in full gear

Foreword
The global push towards sustainable mobility—which gained a
renewed sense of urgency at the recently concluded COP26—has
added impetus to the green movement in India. As electric vehicles
gain popularity in India, both the public and private sectors are
betting big on the industry's promising growth. With the
government’s push for faster adoption, we saw a record-high
increase in e-vehicles sales as the numbers tripled to 1.18 lakh
units in H1 FY22 YOY. Moreover, with the growing
climate-conscious sentiment amongst the consumers and a
recent spurt in domestic EV manufacturing, 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. As a result, the
Indian automobile market, which is already among the most
attractive in the world, now abounds with opportunities for
EV makers and sellers from across the globe. While we are
on the right track towards decarbonising the transportation
sector and reducing tailpipe emissions, there’s more work
to be done. Change is visible in three important areas:
regulation, consumer behaviour, and technology, and
these changes are defining the future potential of
mobility. India will be able to make a noteworthy leap in
EV adoption and environmental sustainability owing to
the above policies, which will be combined with holistic
charging infrastructure and a shift in the market
acceptability of EVs.

Rajesh Jaggi
Vice Chairman - Real Estate,
Everstone Group

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 Electr c mobility in full gear

At a glance
The electric vehicle (EV) industry in
India is currently at a nascent stage. The
EV market is likely to grow, backed by
government initiatives and a move
towards recognising climate change. India
is taking a step towards sustainability and
has vowed to cut its carbon emissions. At
the recently concluded CoP26 summit,
India pledged to reach net-zero
carbon emissions by 2070. In

2070
India, the transport sector
is currently the third
largest emitter of CO2.
This is leading to India's target
to reach
net-zero
increased thrust on EVs
in India. Colliers notes
that over the next five
years, the EV space in
India is likely to see carbon emissions
investments of INR94,000
crore (USD12.6 billion) across
the value chain. This will open
up opportunities in the real
estate sector spanning several
segments. EV sales penetration

Factors driving the

<2% 30%
2020 2030
EV shift in India (Estimated) (Projected)1

Government push By 2030, India to Tax benefits and

for electrification of reduce carbon incentives for first
public transport emission per unit time buyers
of GDP by 45%2

Strong demand Rising crude bill Running cost of EVs is

from E-commerce, and fuel prices significantly less than
3PL for last-mile Internal Combustion
delivery services Engine (ICE)

NITI Aayog | 2As per India’s declaration at COP 26 summit

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Electr c mobility in full gear

EV policy framework
steering investments
2013
National Electric Mobility Mission
The Central Government initiated a broad level
Plan (NEMMP)
policy in 2013 through National Electric Mobility
Policy envisioned faster adoption of
Mission Plan (NEMMP) envisioning faster adoption of EVs through demand and
EVs. Over the years, the government has formulated supply-side incentives such as tax
Faster adoption and manufacturing of (Hybrid &) cuts on purchase, slash in GST,
Electric Vehicles (FAME) policies under the NEMMP, promoting R&D for manufacturing.
to provide demand and supply incentives.

2015
2018
FAME I
Demand incentive
disbursement scheme. It
offered demand - The Ministry of Power set
incentives, through guidelines for charging
reduced prices. infrastructure for EVs.
Incentives of about
- The government amended
INR359 crores (USD 48.2
its sales target of EV
million) for 2.8 lakhs
penetration to 30% by
vehicles3 was disbursed
2030.
to buyers.

2020 The scheme with a

budget outlay of
INR10,000 crore4 (USD

2019
The Central Government capped the per unit
1.3 billion) to generate
cost for charging an EV at a public station.
EV demand, with focus
The revision was made under the ‘Charging
on shared transport.
infrastructure for EV’ guidelines.
FAME II About 86% of the
budget was earmarked
for demand incentives.

The scheme will incentivize

2021
domestic production of
lithium-ion batteries and an outlay
of INR26,000 crore (USD3.4
PLI scheme for billion) is planned.
automotive sector -OEMs can get 13-18% incentives
on incremental EV sales over FY20

3, 4
National Electric Mobility Mission Plan

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 Electr c mobility in full gear

Government incentives
providing thrust to manufacturers
Currently, 15 Indian States have either approved or notified EV policies, with 6 more states in the draft stage.

States like Delhi, Gujarat, Maharashtra and Meghalaya are focusing on demand

01 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.

02
Battery manufacturing companies will be benefited by setting up
base 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.

03
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.

Comparison of incentives offered by various states

Supply side incentives Demand side incentives

Land Capital Development Subsidy for Road tax

related subsidy of industrial consumers (INR per exemptions
incentives clusters KwH) (one time)

Andhra Pradesh 100%

Tamil Nadu 100%

Karnataka 100%

Uttar Pradesh 75%-100%

Telangana 100%

5,000 (on 2 & 4

Maharashtra 100%
wheelers)
10,000 (on 2 & 4
Gujarat 100%
wheelers)
5,000 (2 wheelers)
Delhi 100%
10,000 (4 wheelers)
Source: Colliers, State EV Policies

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Electr c mobility in full gear

Real Estate opportunities

in EV ecosystem
The growth of the EV industry lends itself to opportunities in the real estate sector.
Colliers notes there is ample opportunity for landlords across the spectrum from
manufacturing to charging infrastructure.

Manufacturing Warehousing Dealership Charging

Land parcels
a) For setting up giga factories
for lithium-ion batteries.
b) For production of EVs/ auto
ancillaries, steered by China
+1 strategy
network infrastructure
a) Controlled settings for Experiential stores on Dedicated charging stations
storage of batteries. high streets of metro that landlords can outsource to
b) Storage of finished EVs cities that can allow test charging service providers, in
in high specification, driving, and enhance and around residential
Grade A spaces. experience of customers. complexes, malls, hotels.

HIGH MEDIUM MEDIUM HIGH

Real Estate
opportunities

1,300 acres
Significant land requirement
pan-India to set up 110
GWh battery manufacturing
13.5 msf
capacity by 2030. Total space estimation pan
-India for charging stations
by 2025.

Source: Colliers, Niti Aayog

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 Electr c mobility in full gear

Market entry strategies

Many companies are preferring a plug-and-play model to improve
their speed to market. This model is especially relevant for SMEs
and start-ups as they will not need to go through the entire
process of land acquisition and building factories.

Purpose built factory Speculative leasing Owned factory

• Custom designed facility • Ready built facility • Includes tailor-made

• Asset light model • Asset light model solutions on suitable land
• Typical lock-in period of • Asset heavy model
7-10 years

Pros

Speed to market Limited lock-in compared No monthly rental outgo

Effective space utilization to BTS facility Can be customized as
Predictable lease terms Faster speed to market per business seasonality
with ready facility Potential land
Effective capital deployment
for core operations appreciation

Cons

Higher occupancy costs Base build cannot be Significant upfront

due to customized design
In case of rapid growth,
one might run out of space
completely altered capex
Not a tailor-made solution Challenges with
Renewal rentals can be capacity utilization
higher as they are subject
to prevailing market
conditions

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Electr c mobility in full gear
Real Estate challenges
in EV ecosystem
Challenges
• Lack of focus on R&D for new
battery technologies. India
imported INR6,600 crore (USD929
million) worth of lithium-ion
batteries in 2019-2020.
Policy • For starting a new business, India is
on the 136th rank as per the World
Bank rankings released in 2020.
• Erratic power supply to charging
stations
• Dealing with several construction
permits that take about three
months leads to higher approval
costs
Real • Lack of high-specification Grade A
Estate warehouses for storing lithium-ion
batteries
• High land cost in urban centres
for public charging stations
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Recommendations
• Large-scale investments and venture
funding to research organizations for
newer battery technologies. Investments
in excavation and material sciences to
discover lithium-Ion reserves in India.
• The time taken to start a business has
fallen by 40% over a decade. However, it
is imperative that entry barriers are
reduced through a faster approval
mechanism such as single-window
clearance.
• Reducing the number of permits
specially required for EV manufacturing
set-up. Establishing dedicated EV parks
that provide plug and play facilities.
• Need for developing and retrofitting
warehouses for storing lithium-ion
batteries
• Providing specific tax concessions to
private sector for charging
infrastructure in their premises
 Electr c mobility in full gear

Planned investments of
about USD12.6 billion in
the EV landscape

34 %

Highest share of
64
Planned
%
71
Tamil Nadu,
%

Tamil Nadu in investments of Haryana,

total investments, OEMs account for Andhra Pradesh
followed by 64% share of total to see highest
Andhra Pradesh investments investments in
and Haryana whereas the battery
remaining capital manufacturing,
would be for Li Ion with 71%
battery combined share
manufacturing

Colliers notes that over the next five years, Investments > INR4,000 Cr
India will likely see total investments of Investments < INR4,000 Cr
INR94,000 crore (USD12.6 billion) in the
EV space. The investments are based on
companies’ planned outlay in Uttarakhand
manufacturing capacities across Haryana
states. Most of the investments
Uttar Pradesh
are planned in the EV Rajasthan
components and assembly-line
production, followed by
investments in battery Gujarat West Bengal
manufacturing.
Chattisgarh

USD8.0 USD4.6
Maharashtra

Telegana

billion billion Andhra Pradesh

Planned Planned investments Karnataka
investments in Li ion battery
in OEMs manufacturing
Tamil Nadu
Source: Colliers, Industry

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Electr c mobility in full gear

Location picks for

EV and ancillary
components
manufacturing
Some of these locations comprise of
private industrial parks that can cater
to the EV landscape.

Auto hubs Maharashtra and Tamil Nadu Emerging clusters in Telangana and
seeing robust EV ecosystem development Karnataka are drawing significant
investments led by government incentives

Focus on electric 3-wheelers, 4-wheelers and bus Emerging clusters and favorable government
manufacturing. Few firms are looking to set up base policies drawing attention of start ups, new entrants
for Li-Ion Cells manufacturing and established firms

Location picks Location picks

Chennai (Tamil Nadu) Chandanvelly-Sitarampur (Telangana)
Hosur (Tamil Nadu) Divitipalli (Telangana)
Coimbatore & Krishnagiri (Tamil Nadu) Bengaluru (Karnataka)
Pune (Maharashtra) Chikaballapur (Karnataka)
Hubli- Dharwad (Karnataka)

Electric two-wheelers and three-wheelers Battery manufacturing companies

firms eyeing Haryana, Rajasthan and UP eyeing Gujarat

2-wheelers and 3-wheelers manufacturers are While currently Gujarat account for 9% of
showing strong interest in Haryana and Uttar investments in battery manufacturing, foreign
Pradesh corporates are evincing interest to set up battery
manufacturing units, in partnership with Indian firms

Location picks Location picks

Sohna, Manesar (Haryana) Dholera Special Investment Region (Gujarat)
Greater Noida (Uttar Pradesh)
Neemrana, Alwar & Bhiwadi (Rajasthan)

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 Electr c mobility in full gear

Firms eyeing
battery Giga-factories
We estimate that there is an opportunity for landlords to
monetize 1,300 acres of land pan India for battery
manufacturing capacity of 110 GWh. Moreover, companies
will also set up giga-factories to manufacture batteries,
required for electric mobility targets. These are typically
large facilities that design, manufacture and integrate
battery manufacturing process.

Upwards of India can

5 lakh sf
manufacture

(46,000 sqm) size of a 20%

typical giga factory of its EV battery
requirements by 2030

EV battery demand in India (in GWh)

Conservative scenario Base scenario

50 110 GWh 80 230

GWh
GWh GWh

2025 2030 2025 2030

Source: Colliers, Niti Aayog

Key specifications for highly specialized battery storage warehouses

Fire suppression
Up to 15 ft pallet systems such as
height and up to Fiber glass Ideal humidity
chemical storage fire grated
40 ft ceiling of about 50%
suppression, fire flooring 
height extinguishers

Controlled storage conditions underscore the need for development of new warehouses with enhanced specifications.
We also believe that retrofitting existing warehouses into battery storage warehouses will become imperative.
Source: Colliers

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Electr c mobility in full gear

Charging infrastructure
to need about 13.5msf
of space
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
into space requirement of about 13.5 msf (1.2 mn sqm) of
charging area by 2025.

Minimum requirements and dimensions for charging stations

Type of station

Public charging stations Fast charging (For heavy duty EVs)

Min requirement Min requirement

Every 25 km both sides 1 fast charging station for every 10 EVs

of the highway Every 100 km both sides of the highway

Source: Ministry of Housing and Urban Affairs

Strategies for landlords to monetize

charging infrastructure: Conclusion
The adoption of electric vehicles is
imperative to tackle climate change
Enter a revenue share and move closer towards achieving
Lease out space to deal with the provider our net zero carbon targets. In
such providers for
recent years, the government has
charging infrastructure
laid down an operational roadmap
encompassing demand and supply
related interventions to build and
augment indigenous capacities while
fuelling demand. The government’s
envisioned target of 30% electric
vehicle sales by 2030 can translate
into fresh prospects for the real
estate sector. While the course to
achieve this promising target will be
Landlords can also Create retail recreation
a bumpy ride, but surely the
provide battery options near charging destination is in sight. There have
swapping infrastructure stations been encouraging signs with several
established automotive firms and
start-ups joining onto the
bandwagon. The effective execution
of the government policies and the
active participation of all the
stakeholders will go a long way in
building a strong chassis for EVs and
get them rolling on the road.

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