Indian Economy News

Automakers will pump US$ 10 billion into building EV capacity by 2030

By the end of this decade, automakers in India would invest close to US$ 10 billion (Rs. 80,000 crore) in order to construct the infrastructure needed to manufacture electric vehicles (EVs). The decision was made in the midst of the worldwide electrification wave sweeping the automobile sector. Additionally, the government's push for battery-powered automobiles over pure internal combustion engines has also prompted it.

The capital outlay would comprise investing in battery factories to create batteries from the cell level, creating a few green field EV plants, and supporting grid charging infrastructure.

Two-wheeler manufacturers are preparing to produce 15.5 million EVs, which would be equivalent to nearly two-thirds of the total installed capacity of two-wheelers powered by internal combustion engines (ICE). The tentative plans of carmakers show that they are planning to create a capacity of around 2 million EVs, taking the cumulative installed capacity to around 7.2-7.5 million units by 2030.

By 2030, there could be between 25-30% of passenger cars in India that are electric, with incumbents increasing their production capacity and new carmakers projected to enter the market in 2025.

Maruti announced that it will be launching six electric vehicles by 2031, increasing its installed capacity from the current 2.25 million to almost 4 million units. In order to double the capacity, it is likely to invest US$ 5.47 billion (Rs. 45,000 crore), according to a report from the Economic Times. Mahindra and Tata Motors both declared EV capex of US$ 1.21 billion (Rs. 10,000 crore) and US$ 1.82 billion (Rs. 15,000 crore) that would be incurred over the course of the following 5-7 years. Hyundai recently committed to invest US$ 2.45 billion (Rs. 20,000 crore) over the following 10 years in the southern Indian state of Tamil Nadu.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.