Tamil Nadu’s EV Sector: Projected $40 Billion Growth by 2030
What is the value of Tamil Nadu’s ambition in the electric vehicle (EV) sector? Government projections suggest that by 2030, the state’s EV market could reach $40 billion. This goal hinges on leveraging the full spectrum of the EV ecosystem, including components, raw materials, machinery, tooling, testing, research, and development. The opportunity in the EV parts sector alone—spanning cells/batteries, electronics, motors, telematics, and software—is estimated at $20 billion.
Key raw materials such as cell chemicals, electrical steel, magnets, semiconductors, printed circuit boards (PCBs), aluminium, and copper are vital. In the realm of research and development (R&D), India’s investment is set to grow from $5 billion in 2023 to $16 billion by 2030, with local production increasing from 20% to 60%. Tamil Nadu aims to secure 30% of this burgeoning market, anticipated to be worth $3 billion annually by 2030.
State Industries Secretary, V Arun Roy, highlights Tamil Nadu’s focus on R&D and its emergence as a hub, building on the infrastructure established by companies like Ford, Renault Nissan, and Mahindra & Mahindra. The state’s commitment to R&D and innovation is already yielding results, as seen in initiatives like Mahindra Research Valley’s EV R&D facility, which is at the forefront of developing cutting-edge electric vehicles for both local and international markets.
Tamil Nadu’s strategic investments in innovation are complemented by its existing strengths in automotive technology and auto component manufacturing. With comprehensive policies offering incentives for various aspects of the EV industry, including vehicle manufacturing and R&D, the state is attracting significant interest from investors. Ashok Jhunjhunwala, an EV advocate and founder-president of IIT Madras Research Park, notes the upcoming cell manufacturing plants in Tamil Nadu, signaling a broader investment in the EV system manufacturing.
Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles, underscores the national effort to develop a full-fledged manufacturing ecosystem for EVs. Tamil Nadu, with its proactive approach to creating an attractive investment environment, especially in two-wheelers, three-wheelers, and light commercial vehicles, is well-positioned to capitalize on this momentum. The state’s comprehensive strategy covers nearly every aspect of the EV ecosystem, emphasizing the vast potential in battery, motor, controller, and charger development linked to EV R&D.
EV experts feel TN’s biggest USP is the fact that it has been forward thinking about the ecosystem opportunity. The hub build-up is in waves -If the OEMs come, then tier-1 players come, then testing facilities come, then R&D comes and the rest of the ecosystem players come. “End to end there will be a huge requirement and states that are more forward thinking will capture a larger portion of this huge because it is eco system dependent,”
says EV pioneer Chetan Maini, co-founder and chairman of SUN Mobility.
