Setting its sight on becoming the world’s Electric Vehicle (EV) capital, Tamil Nadu is making steady strides. With auto giants pivoting towards electric mobility, a substantial portion of electric vehicles sold nationwide are ‘Made in Chennai’. According to the Ministry of Road Transport and Highways’ Vahan Dashboard data, 40% of electric vehicles sold in India last year (January to September 2023) were manufactured in Tamil Nadu.
The ministry has set ambitious targets for the adoption of electric vehicles (EVs) in India, with a specific focus on different vehicle segments. By 2030, the government aims for 30% of newly registered private cars, 40% of buses, 70% of commercial cars, and a significant 80% of two-wheelers and three-wheelers to be electric and Tamil Nadu will play a key role in the transition.
The state, which is vying to become the world’s electric vehicle capital, has been working towards giving a big push to the EV ecosystem – manufacturing of batteries, charging infrastructure and others. It is leading the EV revolution from the manufacture of cars, buses, and two and three-wheelers, electric vehicle cells and motors to charging stations and upcoming future mobility parks.
South Korean car maker, Hyundai, is investing Rs 20,000 crore over the next 10 years towards developing an electric vehicle ecosystem in the state. Unsoo Kim, Managing Director and Chief Executive Officer of Hyundai Motor India, said that the company has finalised plans to develop and establish Tamil Nadu as a base for Hyundai’s electric vehicle manufacturing in India. Hyundai is planning to set up a state-of-the-art battery pack assembly unit with an annual capacity to assemble 1.78 lakh units of batteries. It is also planning to install 100 electric vehicle charging stations at key locations on major highways, over a period of five years. Vietnam’s electric vehicle manufacturer VinFast is setting up a car and battery manufacturing plant in the southern district of Thoothukudi for $2 billion.
Similarly, the Renault and Nissan alliance is investing Rs 5,300 crore to modernise the Chennai plant. The investment will help the alliance shift to the manufacturing of electric vehicles. Royal Enfield is investing Rs 1,000 crore in Tamil Nadu towards an electric vehicle manufacturing facility and new product development under the Internal Combustion Engine portfolio. Royal Enfield sources said it plans to roll out the first electric vehicle from its Vallam plant by 2025.
Tamil Nadu has also revised the electric vehicle policy to strengthen the Electric Vehicle (EV) manufacturing value chains, improve EV adoption across vehicular segments, increase electric public mobility solutions, improve green electricity value chains, promote rapid EV infrastructure development and leverage the synergies of the existing research and development centres in the state. Six cities of the state – Coimbatore, Tiruchi, Coimbatore, Madurai, Salem, and Chennai– have been identified for development as electric vehicle hubs.
Some of the natural advantages that aid this sector include the vast availability of a highly competent, trained workforce, an excellent network and supply chain of ancillary suppliers, a vibrant auto and auto component manufacturing ecosystem and Tamil Nadu’s excellent infrastructure and logistics support systems.
Industries Minister TRB Rajaa said that the EV sector in Tamil Nadu offered multiple benefits – lesser dependence on fossil fuels, increased investments with an estimated Rs 50,000 crore expected by 2025, generation of about 1.5 lakh jobs, and contribution to sustainable development goals. Women in rural areas around EV clusters would benefit a lot through the generated employment opportunities.
According to the minister, Tamil Nadu is among the few states with a future-ready EV policy. The policy has paved the way for revolutionary changes in the way people will commute, backed by the ‘Battery-as-a-Service’ initiative. Plenty of subsidies are on offer for firms that come forward to install battery swapping stations, apart from concessions over cost on equipment and machinery purchase for setting up charging stations in public places, says the industries minister.
However, the EV industry is faced with two major challenges in the state. One is the infrastructure set up for electric or hydrogen vehicles and the other is the development of technology. Charging infrastructure is one key aspect that needs to be looked at. Unlike fossil-based fuel infrastructure, this will be a major issue for those using in electric vehicles. The other challenge is developing technology like swap technology of batteries, self-charging or high speed-charging or even roof-charging like the electric train to overcome the limitations of infrastructure
The Deloitte Knowledge Paper on ‘Accelerating Tamil Nadu’s Progress to Becoming a One Trillion Dollar Economy by 2030-31’ has suggested that the state can provide government-backed financial assistance for auto drivers to acquire and operate electric vehicles via usage-based payment plans, incentivise private owners by offering public charging infrastructures and battery swap stations, and subsidise the cost of electric vehicles via rebates on the state goods and services tax.
The report has also stated that electric vehicle conversion can also be achieved through retrofitting. Retrofit kits for existing autos can help with electrification goals, and battery standardisation with retrofit kits can help push battery swap infrastructure as well. These changes will increase demand and make the public more open to adopting electric vehicles.
Satyakam Arya, managing director and chief executive officer of Daimler India Commercial Vehicles, said the automotive industry is undergoing a profound transformation which is getting shaped around four pillars–Connected, Autonomous, Shared Solutions and Services, and Zero Emissions (CASE). This transformation is probably the greatest disruption in the history of mobility. “We are looking at a very profound disruption led by smart manufacturing concepts, zero emissions, and self-driving technologies. The evolution of mobility solutions will be built on connected vehicles generating vast amounts of data that can be harnessed to provide greater value to the users. This is a phase where technology and R&D have once again come to the forefront with the focus not only on hardware but also on software and data,” he says.
“EV is going to happen, but to what extent is a question that only time will tell? Technologies are still evolving and one cannot bet everything on one particular power source. This is a significant challenge that I see for R&D companies,” says Srivats Ram, Vice Chairman of CII-Tamil Nadu State Council and Managing Director of Wheels India Ltd.