Tamil Nadu is rapidly positioning itself as India’s electric vehicle (EV) hub, with an impressive surge in both domestic and international investments aimed at scaling up EV manufacturing capabilities. The state's evolving landscape is setting the stage for sustainable growth in the electric mobility sector, driven by strategic investments and the presence of major EV players. Tata Motors-JLR is preparing to lay the foundation stone for its new plant in Tamil Nadu, marking a significant milestone in India's premium electric vehicle manufacturing. This signals a major boost in the state’s EV infrastructure, with the plant expected to begin operations within 12-18 months and produce “Made in India” models.

The presence of leading players such as Ola Electric, TVS Motor, and Ather Energy further solidifies Tamil Nadu’s dominance in the two-wheeler EV segment, with the state accounting for 70% of India’s two-wheeler EV production. In 2024 alone, substantial investment commitments have been made by Tata Motors-JLR, with US$ 1.07 billion (Rs. 9,000 crore), while VinFast plans to invest up to US$ 2 billion in its new EV facility. These developments are further complemented by Royal Enfield’s investment of US$ 358.1 million (Rs. 3,000 crore) and Stellantis, which is committing US$ 238.7 million (Rs. 2,000 crore) to support the state’s thriving EV ecosystem.

A Strong Industrial Foundation and Strategic Investments

Tamil Nadu’s prominence in the Indian auto industry is not new, but its strategic focus on EVs is propelling the state to the forefront of India’s green mobility revolution. The state benefits from over 1,500 auto and auto component factories, creating an ideal environment for new entrants and established brands to integrate seamlessly into the ecosystem. Hyundai is another key player in the EV space, expanding its Chennai unit with a US$ 2.39 billion (Rs. 20,000 crore) investment, aimed at bolstering its EV production capabilities.

In addition to Tata Motors-JLR’s venture, Ford Motor Company is reportedly planning a comeback with new EV initiatives in the region, while VinFast is expected to inaugurate its facility by next year, bringing fresh momentum to the state's electric vehicle ambitions. The state’s commitment to EV manufacturing is further highlighted by Tamil Nadu Chief Minister Mr. MK Stalin’s involvement in the Tata Motors-JLR plant's foundation stone ceremony, scheduled for September 28. This will be India’s first premium vehicle manufacturing unit, which underscores Tamil Nadu’s strategic importance in the national automotive landscape.

Leading the Two-Wheeler EV Revolution

Tamil Nadu’s robust focus on two-wheeler electric vehicles has allowed it to dominate the sector, with a current production capacity of 10 million units. Major players such as Ola Electric, TVS Motor, and Ather Energy are leading the charge in making affordable and efficient electric scooters and motorcycles available to consumers, helping India transition towards greener mobility solutions. The state’s well-established supply chain and trained workforce play a critical role in supporting the two-wheeler EV industry, ensuring both scale and quality are maintained across the production process.

In an exciting development, Citroën recently became the first multinational to export domestically made electric vehicles from India, producing the Ë-C3 in Tamil Nadu. This marks a significant achievement, as it not only showcases Tamil Nadu’s world-class production capabilities but also highlights the state’s role in India’s global EV ambitions.

Why Tamil Nadu?

Tamil Nadu's automotive strength lies in its well-established infrastructure, which includes a combination of strategically located ports, a highly skilled workforce, and reliable logistics networks. These factors have helped the state secure its place as one of India’s top manufacturing hubs. Not only does Tamil Nadu contribute 36% of India’s two-wheeler production, it also accounts for 25% of four-wheeler production and 40% of tyre production. These impressive statistics reflect the state’s integrated supply chain, which can meet the growing demand for electric vehicles in both the domestic and international markets.

The state’s focus on developing a sustainable supply chain for electric vehicle components has attracted significant investment from both local and international companies. Additionally, Tamil Nadu's business-friendly policies and infrastructure, such as special economic zones (SEZs), ensure that the state continues to attract large-scale manufacturing projects, particularly in the electric vehicle space.

Future Outlook and Key Projects

With substantial investments already flowing into Tamil Nadu’s EV sector, the future looks bright for the state as a global electric vehicle hub. The Tata Motors-JLR plant will not only bolster local production but also elevate India’s status on the global stage by producing premium electric vehicles domestically.

Similarly, Hyundai's roadmap for EV expansion signals the company’s intent to double down on its Indian operations, while VinFast’s anticipated facility opening in 2024 will introduce new competition and innovation to the market. These developments, combined with Royal Enfield's and Stellantis' investments, are expected to bring even more growth to Tamil Nadu’s already booming EV sector.

The Tamil Nadu government’s proactive approach, combined with the state's natural advantages, makes it the preferred destination for EV manufacturers. The high level of EV production and continuous infrastructure development ensure that the state remains on track to maintain its leadership position in India’s electric mobility revolution. With over 1,500 auto component factories already in operation, new manufacturers will find it easy to scale their operations and tap into existing resources, further enhancing Tamil Nadu’s appeal as a manufacturing powerhouse.

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