Exclusive: Royal Enfield plots new factory in Tamil Nadu, revs up for global ride and EV foray

Chennai-based midsize motorcycle major Royal Enfield plans to set up a new factory in Tamil Nadu to cater to its growing global ambition and also diversification into electric vehicles.

According to several people in the know, the company has already acquired a 60-acre land parcel in Cheyyar, on the outskirts of Chennai, which is likely to be the key production base for its two-wheeled EVs in the future. Royal Enfield is likely to invest between Rs 1,000 to Rs 1,500 crore in the next 12-24 months towards expanding both its product portfolio and also manufacturing capacity.

While the first electric motorcycle is likely to roll out from a dedicated setup within the existing Vallam Vadagal plant, which is its core IC engine production base, it is learnt that the company has already commenced work at the Cheyyar plot to ensure a smooth transition to EVs as and when the portfolio of zero-emission models are developed and ready for rollout.

While Royal Enfield’s existing plants in Oragadam and Vallam Vadagal have a combined manufacturing capacity of over a million units per annum and capable of meeting growing demand for the next few years, the expected recovery in the domestic two-wheeler market, RE’s aggressive global expansion and diversification into EVs calls for the company to be future-capacity-ready.

The 60-acre plot of land in Cheyyar has been acquired to move some of the activities from the Thiruvottiyur facility – operating since 1995 – which has become a thriving residential area. According to sources, the company may spend about Rs 100 crore to Rs 150 crore in ground-laying work but the brand-new factory may only come up by 2025. 

An email sent to Royal Enfield seeking responses on the new factory did not elicit any response till the time of this report being published.

Shifting gear into EVs

Meanwhile, Royal Enfield has already set up a dedicated EV team led by Umesh Krishnappa, who is the CTO steering the project. Autocar Professional learns that the company is working on two different EV architectures – an in-house-developed (codename L1A) EV which is likely to hit the roads in FY2024-25, and alternatively utilise the EV platform of Stark Motorcycle, a Spanish EV start-up in which Royal Enfield’s parent Eicher Motors acquired an equity stake. 

Autocar Professional had exclusively reported, in early February 2023, that Royal Enfield plans to invest about $100-150 million for EVs. Developmental work on a dedicated L platform has begun with plans to produce three different models with a combined potential of between 120,000 to 180,000 units units per annum

The L platform is being designed factoring a global audience in addition to the emerging electric motorcycle market in India. The prototype is expected to be ready in the next 12 months, with the company wanting to get the EV validated before end-2023 to be ready for a market launch in 2024.

“The EV team is working like a start-up and hence the company brought on board Umesh Krishnappa, the previous CTO from Ola, to define the roadmap. As against the monthly product review meetings, the EV team meets almost on a weekly basis to crystallize the plan. The product portfolio is a slight departure from Royal Enfield’s current DNA. The portfolio is being developed with a big emphasis on creating a model that is compact, light and high on performance,” said one of the five people aware of the company’s plans.

These developments happen at a time when Royal Enfield’s ICE rivals Bajaj Auto, TVS Motor and Honda Motorcycle & Scooter India have already defined an ambitious EV foray. Royal Enfield, however, wants to execute its plans with a “steady surefootedness”. 

Siddhartha Lal, managing director of Eicher Motors, has always maintained that the company does not envisage being the first mover and is fine with entering the EV market later with a differentiated offering.

A Royal Enfield spokesperson had earlier told Autocar Professional that the company has made huge strides in its “EV journey” over the past few years. The R&D programmes have included a major focus on sustainability mobility technologies and there are several ideas in “advanced stages of testing.”

“Our approach to developing an electric motorcycle has been very different and we have spent considerable time in studying and understanding the market and customers. We are strategically working on our EV portfolio and business model, and have started deeper investment in the segment,” added the spokesperson.

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