Tamil Nadu, which is frequently referred to as India’s Detroit because of its booming auto industry, is also not in the mood to miss the EV bus. Current events confirm this. The $2 billion plant in the southern state is a commitment made by VinFast, a Vietnamese manufacturer of electric vehicles (EVs). And as previously announced, following the ceremony to lay the foundation stone, on September 28, work on the Tata Motors-JLR facility will begin. Ford Motor has also declared its intention to return to the state with its EV aspirations.
Good supply-chain networks, skilled labor, and favorable industrial rules that were introduced back in 2014 have made it easier for EV manufacturers to establish themselves. Currently, Tamil Nadu produces over 40% of all EVs produced in the nation, including automobiles, two-wheelers, and three-wheelers. Three of the top five EV producers in the two-wheeler market are already headquartered in the state: TVS Motor, Ather Energy, and Ola Electric.
With a current capacity of 10 million units, the state already accounts for 70 per cent of all EV two-wheeler manufacturing in India. Hyundai, a significant passenger car manufacturer, has already set out a Rs 20,000 crore development plan for its Chennai facility. In addition to Hyundai and Stellantis’ (Rs 2,000 crore) development ambitions, Tata Motors-JLR (Rs 9,000 crore), VinFast (up to $2 billion), and Royal Enfield (Rs 3,000 crore) have already committed to investing in electric vehicles by 2024. With the export of the ×-C3 produced in Tamil Nadu, Citroën became the first global automobile manufacturer in India to sell domestically produced electric vehicles abroad in April.
The flourishing habitat
The state’s advantage over others, in the opinion of industry analysts, stems mostly from the existence of over 1,500 manufacturers that produce automobiles and car components. It is easy for new participants to integrate into this well-established ecosystem. Given their emphasis on exports, Tata Motors-JLR and VinFast are critical to the state. But it also needs to strengthen the ecosystem of its subsystems. With the current infrastructure in the Hosur area, the state has a first-mover advantage, according to Thiru Srinivasan, Senior Advisor, FameTN‘s Electric Vehicle Sector.
On September 28, Tamil Nadu Chief Minister MK Stalin will lay the cornerstone of the Tata Motors-JLR facility in Panapakkam, Ranipet district. For the first time, an upscale car will not be constructed in India but rather produced entirely there. The unit should be up and running in 12 to 18 months. Along with Tata EVs built on the same architecture, Tata Motors plans to sell “Made in India” cars based on JLR’s Electrified Modular Architecture (EMA). Apart from bringing in their own suppliers, Tata Motors is anticipated to rely on the current Hyundai Motor India (HMIL) and Renault Nissan Automotive India ecosystem.
The EV hubs in Tamil Nadu
Six cities have been designated by the state government as electric vehicle hubs: Coimbatore, Trichy, Tirunelveli, Madurai, Salem, and Chennai. A skilled labor pool, a network and supply chain of auxiliary suppliers, a thriving car and auto component manufacturing environment, and infrastructure and logistics support systems are some of the inherent benefits supporting this industry. As per Guidance Tamil Nadu, the state makes up thirty-six percent of India’s total output of two-wheelers, twenty-five percent of four-wheelers, and forty percent of tires.
