The third quarter of 2024 has proven to be a transformative period for India’s automotive and electric vehicle (EV) industry, marked by a substantial rise in private equity (PE) investments, mergers and acquisitions (M&A), and public market activity.
With increasing momentum toward sustainable and technology-driven mobility solutions, the industry is experiencing a strategic shift, reflecting both economic and governmental priorities.
Deal Activity, Financial Growth
Deal volumes witnessed a modest 14% increase over the previous quarter, with a total of 32 deals. However, the surge in deal values was far more significant, escalating by an impressive 290%. This sharp rise in deal value highlights the growing strategic interest in sustainability and innovation within the automotive sector. A focus on global expansion, clean energy solutions, and advanced mobility technologies has become the driving force behind these investments, said, Saket Mehra, Partner, Grant Thornton Bharat.
This financial dynamism signals a broader macroeconomic shift, with increasing government support aimed at accelerating EV adoption and establishing India as a global leader in the sector. The PM E-DRIVE Scheme, offering subsidies and demand incentives worth $443 million, is a prime example of the government’s commitment to this transition. The scheme targets the adoption of 24.79 lakh electric two-wheelers (e-2Ws), 3.16 lakh electric three-wheelers (e-3Ws), and 14,028 electric buses (e-buses), while also incentivising the development of a robust charging infrastructure. Such policies are positioning India for a rapid transition to electrification in key vehicle segments.
India's Role In Global Automotive Exports
India's automotive sector, already a global player, is poised to strengthen its position further, particularly in the EV and auto-component sub-sectors. The sector is expected to contribute a staggering $1.6 trillion to India’s GDP by 2047, with exports alone anticipated to exceed $500 billion. This ambitious projection underscores the potential for India to become a global hub for EV production and exports, buoyed by its cost competitiveness, growing technical expertise, and supportive regulatory environment.
As the focus shifts toward alternative fuel technologies, India is likely to attract even more global PE investments and strategic partnerships, reinforcing its leadership in the global automotive landscape. With sustainable mobility solutions gaining traction worldwide, India’s proactive stance in this area will make it a crucial player in meeting global demand for electric and smart mobility solutions, he noted.
Outlook, Industry Expectations
Looking ahead, the upcoming quarter is expected to bring further excitement to the sector, with two major IPOs anticipated to generate significant market interest. The IPO activity, combined with ongoing M&A deals and PE investments, highlights the broader industry confidence in India’s long-term automotive potential.
Mehra emphasised the significance of Q3 2024, stating, 'Q3 2024 has been a pivotal period for the automotive and EV industry, with 32 deals totaling $ 1.9 billion, marking the highest activity since Q4 2021. Strong investor confidence, major IPOs, and strategic M&A activity signal exponential growth ahead. With government support through the PM E-DRIVE scheme and the industry’s focus on alternative fuel technologies, we expect increased global PE investments and partnerships, positioning India as a leading export hub for electric and smart mobility solutions.'
Q3 2024 has laid the groundwork for India’s automotive and EV industries to accelerate toward a future driven by innovation, sustainability, and global competitiveness. The strong financial activity, coupled with government initiatives like the PM E-DRIVE Scheme, positions India to become a key player in the global shift toward electrification. With sustained growth in investments and a strategic focus on clean mobility, the sector is poised for exponential long-term growth, reinforcing its importance in India’s economic trajectory. The industry is expected to continue creating long-term value as it navigates the rapidly evolving global automotive landscape.
Also Read:
Sustainable Profitability Is Key For Auto Dealerships: FADA President Vigneshwar