In a recent tweet, industries minister T R B Rajaa announced that the state would host an international electric vehicle conclave on November 21 to “promote Tamil Nadu’s booming EV industry”. The tweet came on the heels of the latest data from the Vahan dashboard, which showed that EV manufacturing companies in TN contributed more than 40% (410,000 units) of the just over a million units sold in India between January 1 and September 20, 2023. For a state that’s already an auto hub, the EV aspiration is a natural step up. With the Global Investors Meet just round the corner, TN is looking to tap into its EV footprint to attract fresh investments, say government officials.
“We are expecting big investments to come in the GIM both in OEMs and components in the EV space,” says Vishnu Venugopalan, MD & CEO, Guidance Tamil Nadu. “In the last one year alone, EVs have attracted `40,000 crore in investments and the state government is focusing on the future mobility SIPCOT park in Krishnagiri, which will be a hub for EV-related investments,” he adds.
The state is well on its way to hitting the investment targets set in the EV policy announced earlier this year. “From the investment traction we have received so far, we need to increase our target,” says industries secretary V Arun Roy. When the EV policy target was announced, it took into account the existing `32,000 crore investments in projects already greenlit. After the policy was announced in February this year, another `8,000 crore investments have come in. The state had set a target of $6 billion (`50,000 crore) and creation of 1.5 lakh jobs in the EV sector over a five-year period.
“Tamil Nadu has always been the auto capital, so EV was a natural progression,” says Venugopalan. “Similarly, electronics is a segment where TN has a natural strength; so combining auto and electronics for EV with a focus on both domestic as well as exports makes sense.”
For Tamil Nadu, the EV pitch is important beyond the immediate investment windfall. It’s the ticket to being future ready. “After 10 years, ICE manufacturing may become less important. TN as a manufacturing destination needs to be at the forefront of that transition,” says Arun Roy. Besides, in technologies such as engine drives, battery and motors, there will be “spin offs in other sectors” as well, he says. Most importantly, as the “EV eco-system comes up including charging infrastructure and battery swapping network”, TN’s large MSME sector will find new growth opportunities, he adds. In associated sectors such as logistics, where startups are already providing small electric delivery vans and light trucks, too there are opportunities for MSMEs to have a presence.
The existing investors are gung-ho. TN has always been a progressive state and has consistently taken the lead in embracing electric vehicles,” says Sanjay Behl, executive director and CEO, Greaves Electric Mobility, which has set up a half-a-million-unit capacity e-scooter plant in Ranipet. Both Hyundai and Renault-Nissan, the two big ticket auto/EV investors this year, are building on existing manufacturing footprint in the state.
However, the state’s e-mobility push has largely left out retrofitting, one of the cheapest ways of transitioning the existing pool of vehicles. “The state government is right in focusing on investments, but they also need to look at fundamentals,” says EV evangelist Ashok Jhunjhunwala, founder-president of IIT Madras Research Park. “There should be focus on retrofitting particularly three-wheelers and small transport vehicles. There should be focus on developing batteries, cell chargers, converters, motors locally.” In other words, the end consumer should find it easy to buy, charge, repair and maintain an EV. “There should be a network of roadside repair shops with trained personnel to handle EVs as well,” he says. Part of the problem is standardisation policies. India is one of the few countries in the world that has not standardised chargers for example.
There is also the issue of TN’s relatively low EV sales compared to its EV manufacturing footprint. This is thanks to the “absence of e-rickshaws as a prominent EV category in Tamil Nadu, as opposed to its significant market presence at the national level, where it formed nearly 34% of all EV sales,” says Gagan Sidhu, director, CEEW Centre for Energy Finance. “Electric two-wheelers on the other hand consist of around 85% per cent of the state’s EV volumes (as of August 31) which is considerably higher than the national average of around 55%,” he says. Given that TN’s manufacturing footprint is largely electric two-wheeler driven, this skew is not surprising.
