Automotive investments set to soar 13x to Rs 4 lakh crore in five years: CRISIL

The automotive sector is poised to become a key driver of green investments in India between 2025 and 2030, with future investments projected to surge 13.4 times to ₹4.1 lakh crore, according to CRISIL's Infrastructure Yearbook 2025, released in Delhi on Wednesday.

While EV investability index (that tracks investment potential) has fallen by 4.4% year-on-year in 2024, the segment continues to have long-term growth potential, Hemal N Thakkar, Senior Practice Leader & Director at CRISIL said.

"There was a lot of ambiguity, especially with respect to demand incentives with FAME 2 ending, EMPS was coming in, etc. People expected in the last budget that a new fame policy will be announced but we had an extension of 6 months in the form of EMPS and the PM e-drive came in. So, as compared to the last year, we see that there was some gap in terms of clarity on the demand incentive side which led to a reduction either in terms of customer confidence or in a investment perspective," he said.

He adds that because of this loss in momentum, investment saw some kind of a slowing. "But if you look at it from a long term perspective, we are expecting electrification to pick up significantly," he said.

In the electric PV space, CRISIL expects about 17% to 20% electrification by 2030. In the two-wheeler space, it's expecting about 35% to 40% and three wheelers, it is expecting it to be about 35 to 40% penetration with segments like e-commerce, e-retail or last mile mobility driving future growth. "That is something which will drive significant investment. Apart from it, there are two other levers: one is advanced cell chemistry because of which investments will happen in the battery pack space. Therein we are expecting significant investments to happen and on the charging infrastructure side we are expecting reasonably strong investments to happen over the next couple of years. So, all this put together you know we are looking at a little more than 4 lakh crore of investment happening in the next 5 to 6 years up to 2030," Thakkar said. 

He added that while there was a lull phase due to policy uncertainty because of which there was a blip for a quarter or so, but things have picked up. "The upcoming Bharat Mobility Expo you will actually see you know lot of launches happening on the EV side. That itself is a proof that people have been investing in this space and there are lot of product launches which are happening in newer platforms and not only existing  platforms," he said.