Tamil Nadu Budget: 46% Of Two-Wheeler EVs Sold Last Year In India Manufactured In The State

Highlighting that Tamil Nadu has emerged as the leading investment destination for electric vehicle (EV) makers, finance minister Palanivel Thiaga Rajan, during his Budget 2023-24 speech, said that 46% of two-wheeler EVs sold in the country last year were manufactured in the state.

“Tamil Nadu remains the forerunner in production of electric vehicles (EVs), which are rapidly emerging as an alternative to the fossil fuel-based vehicles,” he said.

Without naming Ola Electric and its manufacturing plant in the Krishnagiri district, Rajan said that the largest electric two-wheeler manufacturing factory in the world is established in the state. 

The Bengaluru-based electric two-wheeler major has a 500-acre manufacturing facility in Tamil Nadu, which it claims to be the largest two-wheeler EV manufacturing plant in the world. 

Despite multiple controversies surrounding Ola Electric’s escooters – from questions over their safety to customer complaints about delivery and after-sales service, the Bengaluru-based startup is leading the electric two-wheeler space in terms of sales in the country. As per Vahan data, as of March 20, out of the 6.84 Lakh two-wheeler EVs registered in the country in FY23, 1.42 EVs were of Ola Electric.

Besides Ola Electric, Ather Energy, another major player in the space, also has two manufacturing facilities in Tamil Nadu. In FY23, Ather Energy saw total escooter registration of over 71K units. On the other hand, TVS Motors and Simple Energy also have their electric two-wheeler manufacturing facilities in the state.

Meanwhile, Ola Electric recently announced an investment over INR 7,600 Cr in Tamil Nadu in the next five years to establish an EV Hub which will be spread across about 2,000 acres and will be the world’s largest EV facility at a single location. The hub would come up in Krishnagiri and Dharmapuri districts.

Tamil Nadu Bets Big On EVs

In an attempt to boost the EV ecosystem in the state, the Tamil Nadu government notified an updated EV policy last month. The latest policy provides higher incentives to boost EV and component manufacturing in the state, subsidies for commercial EVs across categories, among others. It also offers tax exemptions to promote the EV ecosystem in the state. 

The EV policy aims to attract investments of INR 50,000 Cr and generate 1.5 Lakh new jobs. The state government also aims to promote Chennai, Coimbatore, Tiruchirappalli, Madurai, Salem, and Tirunelveli as pilot cities for implementing e-mobility solutions. 

It must be noted that besides two-wheeler EV startups, large automobile manufacturers in four-wheeler categories, like Hyundai, Nissan, and BYD, also have their manufacturing facilities in the state.

However, despite the growing EV and component manufacturing in Tamil Nadu, the state is lagging in terms of EV adoption as compared to other Indian states. As per the central government’s latest data, the number of EVs in Tamil Nadu stands at 1.29 Lakh. This is much lower than Uttar Pradesh, which is leading the race with 4.65 Lakh vehicles, and Delhi (2.03 Lakh), Maharashtra (2.26 Lakh), Karnataka (1.83 Lakh), and Rajasthan (1.43 Lakh).

In the FY24 Budget, Rajan also announced launching a climate literacy programme called ‘Climate Warriors’, which will be led by women self-help groups. In the first phase, 500 such groups will lead the green campaign and they will be provided with electric autos at a cost of INR 20 Cr.