Tamil Nadu CM MK Stalin will lay the foundation stone of Tata-JLR’s new plant in Panapakkam on 28 September 2024. This marks a significant event as it is India’s first premium vehicle manufacturing unit. It is a $1.07 billion investment in the EV infrastructure of the state.  Jaguar Land Rover is a wholly-owned subsidiary of Tata Motors since 2008.

Tamil Nadu already manufactures 70 per cent of India’s EV two-wheelers. It hosts manufacturers like Ola Electric, TVS Motor and Ather Energy. It is also home to approximately 40 per cent of two-wheelers, three-wheelers and cars. Earlier this year French Car maker Citroen started exporting domestically made EVs with the E-C3 produced in Tamil Nadu to international markets. Hyundai is also expanding with an investment of $2.39 billion for its Chennai unit. Vietnam-based EV manufacturer VinFast has promised a $2 billion plant in the coastal state of Tamil Nadu. Ford is also expected to make a comeback with EV manufacturing units. Apart from that there are other investment commitments such as $358.1 million from Royal Enfield and $238.7 million from Stellantis.

A hub of Auto and Auto Components Manufacturing

Tamil Nadu has always been known as the automotive manufacturing hub with the presence of numerous Original Equipment Manufacturers and a robust vendor ecosystem. According to Guidance Tamil Nadu state contributes to 36 per cent of total two-wheeler production, 25 per cent of four-wheeler production and 40 per cent of tyre production in India. According to Industry Experts, Tamil Nadu is home to 1500 automotive manufacturers. The already established parts of the value chain allow EV manufacturers to integrate easily with the system.

Creating a Robust EV Ecosystem

Tamil Nadu government perceives that Electric Vehicles are fundamentals of last-mile connectivity. The government in its 2023 EV policy has underlined the objective to make Tamil Nadu the preferred destination for EV manufacturing for South Asia. As a policy measure, it plans to promote Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Tirunelveli as pilot cities to implement e-mobility solutions.

The Tamil Nadu Government has provided various policy measures for a smooth transition from ICE vehicles to EVs. There are facilities like an upskilling allowance of 10 per cent of the existing workforce, training subsidy of Rs 4000 per worker for 6 months and Rs 6000 per worker for 6 months for women and transgender employees, persons with benchmarked disabilities, and persons from SC/ST communities. The Government of Tamil Nadu has amended building and construction laws to integrate charging infrastructure of EVs at the planning stage of all new construction and apartments in cities. The Tamil Nadu Industrial Policy 2021 encourages the growth of sustainable manufacturing practices. Projects under the policy are entitled to a Green Industry Incentive of Rs. 1 crore. Projects are also provided with a 100 per cent electricity tax exemption for five years. The industries are provided with subsidized land with 10 per cent concessional rates in A and B districts and 50 per cent concessional rates in C districts. There will be provisions for 100 per cent reimbursement on the employer’s EPF contribution.  A 6 per cent rebate on the rate of loan interest will be provided for six years. An additional subsidy of 20 per cent will be provided under the existing capital subsidy scheme to MSMEs engaged in the manufacture of EV components and charging infrastructure.