ICRA, a leading credit rating agency, predicts a surge in capital expenditure (capex) for electric vehicle (EV) components, surpassing Rs. 25,000 crore in the upcoming 3-4 years. The burgeoning Indian EV market, bolstered by governmental support and increasing awareness, is set to drive significant investments in EV infrastructure and technology.
ICRA’s projections indicate robust growth potential for EV components, particularly in the electric two-wheeler (e-2W) and electric passenger vehicle (e-PV) segments. By 2030, the Indian e-2W component market is anticipated to exceed Rs. 1,00,000 crore, with an additional Rs. 50,000 crore projected for e-PV components.
Mr. Shamsher Dewan, Senior Vice President and Group Head – Corporate Ratings, ICRA Limited, emphasized the pivotal role of battery technology in the EV ecosystem. He highlighted the need for India to establish a local ecosystem for battery cell development to achieve mass-scale EV penetration and competitive pricing.
Investments in EV components are expected to accelerate, with approximately Rs. 25,000 crore earmarked for capacity expansion, technology enhancements, and product development in the next few years. The Production Linked Incentive (PLI) scheme and recent EV policies are poised to catalyze this investment surge, supported by private equity interests and state incentives.
As the EV transition gains momentum, ICRA anticipates a gradual shift in demand dynamics, impacting traditional automotive components such as engine and drive transmission systems. Nevertheless, opportunities in alternate applications, new product development, and export markets are expected to offset these challenges to some extent.
