Being the home for several traditional auto manufacturing players and component manufacturers, Tamil Nadu is also the hotbed for innovation in the electronics space and boasts some of the biggest players in the ecosystem.
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Last week, the state’s Minister for Industries Dr TRB Rajaa said that of all the EV two-wheelers that are sold in India, 68 per cent are manufactured in Tamil Nadu. While delivering the keynote address at the first ‘Tamil Nadu Startup Thiruvizha 2023’ in Coimbatore, organised by StartupTN, Tamil Nadu’s nodal agency for Startup and Innovation, Rajaa spoke about how the state is the EV capital of India and has seen electronics exports rise to $5.37 billion in the past year alone.
“We have [about] 450 charging stations in Tamil Nadu [and 6,500 in India as of March 2023] but by 2030 [India] is expected to have 1.3 million charging stations. It is such a huge opportunity for entrepreneurs and MSMEs,” he said.
According to a report released by Research and Markets, the Indian electric vehicle market will grow at a CAGR of 44.5 per cent between 2020 and 2025. Further, the Economic Survey 2022-23 said this market is likely to cross one crore units annual sales and create five crore direct and indirect jobs by 2030.
Rajaa added that there is also a massive opportunity in battery recycling, which, he said, could grow to 128 GWh by 2030. “We need to work on the entire EV ecosystem as one family,” he said.
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Roadmap ahead
As per Tamil Nadu’s EV policy 2023, the state government said that it would declare six cities — Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Tirunelveli — as EV cities. In each of these, the Smart City Commissioner will be appointed as the Nodal Officer to coordinate and drive EV adoption. It also said that the government would undertake the development of public charging infrastructure in these cities through public-private collaboration.
StartupTN mission director and CEO Sivarajah Ramanathan said that the EV opportunity is a unique one as it is a sector that is seeing a lot of activity from startups. He said there was a connect in the case of EVs between startups, MSMEs and large-scale industries and hence is one area that the agency was focusing on.
Tamil Nadu has the largest electric two-wheeler factory in the world by Ola, which is in the process of setting up a gigafactory to support the manufacturing of electric two-wheelers in the future. Several other new-age EV companies such as Simple Energy, Ather Energy, Ampere Electric, among others, have also set up electric vehicle manufacturing plants in and around the Hosur, Dharmapuri and Krishnagiri (HDK) belt, just across the Karnataka border.
Even marque names like Hyundai, Foxconn, Ashok Leyland and TVS Motor have committed significant investments in Tamil Nadu and have EV ambitions. Hyundai Motor India has already committed an investment of over Rs 20,000 crore for EVs in the state, despite being courted by several other state governments.
Foxconn, for instance, has made its EV plans evident. The company best known as the maker of the Apple iPhone is looking to enter the electric vehicle manufacturing space in India. ET had reported that in its annual report, published on May 31, Foxconn said that India will assist with the establishment of a production line this year to provide two-wheeled electric vehicle manufacturing services that will cater to the EV two-wheeler market in Southeast Asia.
Foxconn has been operating out of Tamil Nadu for decades and has only been upping its investments. On July 31, the Taiwanese contract manufacturer signed a memorandum of understanding with Guidance Tamil Nadu to establish a new manufacturing facility in Kancheepuram district for electronics components. It proposed to invest $194 million (Rs 1,600 crore) in the new unit and hoped to create 6,000 new jobs through the new factory.
Sector leader
Recognising the vast opportunity that the space presents, StartupTN, along with investment promotion agency Guidance and other stakeholders, launched the Automotive, Electric Vehicle (EV) and Smart Mobility Forum last month. The forum is the first such strategic fora to bring together sectoral startups, innovators, corporates, experts, industry bodies, aspirants, incubators, mentors, investors, government departments and other stakeholders for focused collaborations to make Tamil Nadu a leader in the sector.
V Vishnu, MD and CEO, Guidance, explained that there were four pillars to the EV ecosystem — OEMs, component manufacturers, the battery ecosystem and circularity, which refers to battery recycling and the like.
“There is potential for investment and growth in all these four verticals,” Vishnu said. “The OEMs, which are the large auto companies looking to diversify into EVs as well as the new-age startups like Ola and Ather, are primarily concentrated in the Hosur-Chennai belt. EV component manufacturing is coming up in a big way and there is potential to build a whole new vendor ecosystem for which startups can play a major role.”
Not just this, he said the TN government was looking closely at the battery manufacturing and circularity aspects as well. Interestingly, Vishnu mentioned that EV commitments in Tamil Nadu have touched around Rs 40,000 crore in the past three years.
