Foreign Investments in Indian EV Industry

Foreign Investments in Indian EV Industry

 

“All are preparing for an advanced ┬álevel of localization of auto part production, with the auto components industry anticipated to reach the $200 Bn mark by 2026.”

We can anticipate positive effects on EV players nationwide as India’s domestic production expands, especially with regard t Made-in-India EV batteries. Our progress towards electrification depends on making EVs more affordable, effective, and consumer-friendly. Since ICE vehicles entered the mainstream due to their accessibility, affordability, and rapid production, we can anticipate the same for EVs with continued government support.

A paradigm shift is currently taking place in the global automotive industry as it attempts to transition to alternative, less energy-intensive options. India is making investments in this transition to electric mobility.

Key drivers of India’s policies to hasten the transition to e-mobility on the one hand and increasing consumer demand on the other are the burden of oil imports, rising pollution, the Russia-Ukraine war escalating price inflation, as well as international commitments to combat global climate change.

By 2030, the Indian automotive market is anticipated to rank third in terms of volume. Reliance to the traditional forms of fuel-intensive mobility will not be viable given the size of the domestic market. Federal policymakers are creating a mobility option that is “Shared, Connected, and Electric” in an effort to address this, and they have set an ambitious goal of achieving 100% electrification by 2030.

India has a lot to gain by switching to electric vehicles (EVs), including access to skilled labor in the manufacturing and technology sectors and a relative abundance of renewable energy resources.

If India continues to make steady progress towards achieving its ambitious 2030 target, the EV market in India will represent a US$206 billion opportunity by 2030, according to an independent study by CEEW Centre for Energy Finance (CEEW-CEF). This would necessitate an overall investment in vehicle manufacturing and charging infrastructure of over US$180 billion. The Indian EV market attracted $6 billion in investment in 2021 and is steadily growing in appeal to investors in venture capital and private equity.

The Indian EV market is expected to expand, according to a different report from the India Energy Storage Alliance (IESA).

According to a different report by the India Energy Storage Alliance (IESA), the Indian EV market will expand at a CAGR of 36% until 2026. The market for EV batteries is also anticipated to expand at a CAGR of 30% over the same time frame. In the meantime, the IESA report projects that the Indian EV market will expand at a CAGR of 49 percent from 2022 to 2030 under a “business as usual” scenario. Overall, the EV sector is expected to generate 50 million indirect jobs and 10 million direct jobs by 2030. (IVCA-EY-Induslaw report). Niti Aayog anticipates that by 2030, the sizeable EV financing market in India will be worth US$50 billion.

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