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Tamil Nadu is all set to become an Electric Vehicle Hub
Simran Kaur
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Published on 8th Jul 21

Tamil Nadu is all set to become an Electric Vehicle (EV) Hub

Tamil Nadu, which is home to industries ranging from bicycles to military tanks and rockets, as well as a slew of multinational automakers, is ready to become an EV hub.

Present-day scenario

Ola Electric Mobility is making quick progress with the development of the world's largest electric two-wheeler factory on 500 acres in Krishnagiri district. The project would have a capacity of 20 lakh units. Ola CEO Bhavish Aggarwal recently tweeted about the Rs 2,354 crore project, stating, "In less than four months, this area has transformed from acres of undeveloped rock terrain to the world's largest 2W factory." The Ola Futurefactory's first phase is approaching completion! Scooters are coming! The crew performed admirably."

However, Ather Energy, backed by Hero MotoCorp, has already begun manufacturing electric two-wheelers at its Hosur plant, with the company announcing an additional investment of approximately Rs 635 crore over the next five years. Greaves Cotton Ltd's subsidiary Ampere Vehicles will begin manufacturing electric two-wheelers at its Ranipet plant by the end of this year.

Greaves Cotton has signed an MoU with the Tamil Nadu government to invest around Rs 700 crore over a ten-year period to establish a plant with an annual capacity of one million units.

Electric Vehicle’s Increasing in Popularity in Tamil Nadu

Tube Investments' Chief Financial Officer, K. Mahendra Kumar, stated that the company will invest approximately Rs 200-250 crore in capital expenditure this year, with a sizable portion going toward the electric three-wheeler project. Ashok Leyland Ltd is another possible investor in the category, given the company's decision to focus heavily on the light commercial vehicle (LCV) segment.

“We have not yet chosen the location of the EV plant; we are currently seeking investors for the project and will announce it once everything is finalised,” an Ashok Leyland spokesperson said, noting that the company has a large presence in Tamil Nadu.

Apart from that, the state government has signed memorandums of understanding with a number of investors on the manufacturing of EVs and batteries (Elest Pvt Ltd for cell, battery, buses and trucks, QMax for lithium ion, DP Auto for three-wheelers).

So what motivates Tamil Nadu's electric vehicle market?

Tamil Nadu is one of the country's fastest growing states, with an enabling legislative climate conducive to cutting-edge technological development, including electric car manufacture. Ampere Electric Vehicles was an obvious choice to expand its footprint in Tamil Nadu with the new and upcoming EV plant in Ranipet, given its R&D centre and strong corporate presence in the state.

Tamil Nadu has an automotive eco system; devoid of batteries, motors, battery management, and cabling, the skeleton of an electric vehicle is a normal internal combustion engine vehicle, as is the talent pool.

The majority of established automakers view the EV as a natural extension or development of their current product lines. Tamil Nadu manufactures around 35% of India's automotive components.

Apart from being a key automobile manufacturing base, Tamil Nadu is a global leader in the tyre production industry. Tamil Nadu has a thriving and growing vendor community. To guarantee an efficient milk run, we strategically located our EV megasite among supply chain partners and vendor clusters.

Tamil Nadu was one of the first states to issue its Tamil Nadu Electric Car Policy 2019, which contains incentives for both the demand side (vehicle consumers) and the supply side (electric vehicle manufacturers) (vehicle producers investing more than Rs 50 crore).

Automobile manufacturers are eligible for a full refund of state sales taxes on vehicles, a capital subsidy, a 100 percent exemption from energy taxes, and a subsidy of between 15% and 50% on land expenses, among other incentives.

Apart from that, the government will establish unique electric vehicle charging stations in important auto manufacturing hubs and in areas with the potential to attract EV investment. The state plan intends to attract investment of Rs 50,000 crore in the EV ecosystem.

We are seeing encouraging responses from a number of states, like Gujarat and Tamil Nadu, in terms of promoting electric vehicles through favourable EV legislation that benefit both affordability and EV uptake.

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