India is on the brink of a significant shift in its automobile sector, with major conglomerates Tata and JSW groups planning to invest over $30 billion in the electric vehicle (EV) sector over the next decade. This move comes in response to the Indian government’s push for higher EV production and greater localisation of supply chains, which are key to achieving the target of 30 per cent EV penetration by 2030.
The report by S&P Global Ratings estimates that about $10 billion of this investment will be in South and Southeast Asia (SSEA). As the world’s most populous country, India’s vast market potential is attracting substantial EV-related investment. The adoption of EVs in India is expected to progress with model launches that bring prices more in line with internal combustion engine (ICE) models, and with the improvement of charging infrastructure.
The Indian government recently launched the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, with a financial outlay of Rs 10,900 crore over two years. This scheme is expected to play a pivotal role in accelerating EV adoption and building critical charging infrastructure nationwide, contributing to a cleaner and more sustainable future.
The transition from ICE in India will initially be more about a shift to alternate fuels rather than pure electrification. Government policies on imports and foreign investment will continue to play a critical role in India’s vehicle electrification.
Hyundai Motor Co. (HMC) and Kia, which combined rank as the second-largest carmaker in India, are also planning to invest in local EV production. Hyundai plans to launch its first fully electric model made in India in January 2025. The company recently completed an initial public offering in India, and part of the proceeds will be used to further their growth and improve its product offerings in the Indian market.
Tata Motors, part of the Tata group, has announced plans to invest about $1 billion in a new EV plant in the south Indian state of Tamil Nadu. Its parent entity, Tata Sons Pte. Ltd., has also announced an investment in a lithium-ion battery plant in the northwestern state of Gujarat, with an initial capacity of 20 gigawatt hours. This plant will support further development of the EV supply chain in the region.
The report estimates that rated carmakers will be spending more than $20 billion building electric vehicle (EV) production in South and Southeast Asia for the next few years. This massive investment in the EV sector by major Indian conglomerates is a clear indication of the country’s commitment to sustainable mobility and the government’s push for a greener future.
