Tamil Nadu focuses on EV revolution, ropes in World Bank to draw roadmap

Tamil Nadu, often referred to as India’s Detroit due to its thriving automobile manufacturing ecosystem, is poised to capitalise on the electric vehicle (EV) revolution. The state has enlisted the World Bank to develop a roadmap for job creation and ecosystem development during the transition from internal combustion engine (ICE) vehicles to EVs.

 

According to a source familiar with the development, World Bank officials will meet various stakeholders from Tamil Nadu on Friday, including Tamil Nadu Generation and Distribution Corporation (Tangedco) and Guidance (an agency that assists investors), to outline the roadmap. It remains unclear whether the World Bank will fund any of the projects in the state.

   

This initiative coincides with the World Bank’s broader efforts to support India’s low-carbon transition. The Bank is planning a $1 billion line of credit to the State Bank of India (SBI) for expanding battery energy storage systems (BESS) and electric mobility in the country. Recently, it approved $1.5 billion in funding to accelerate India’s shift to low-carbon energy.

 

“When the transition to EVs happens, there will be significant job losses in the state. The goal is to devise a strategy to offset this impact and provide new skills to existing employees,” the source said.

 

The state government has identified six cities – Coimbatore, Trichy, Tirunelveli, Madurai, Salem, and Chennai – for development as EV hubs. Tamil Nadu’s natural advantages include a trained workforce, a robust network of ancillary suppliers, a vibrant auto and auto component manufacturing ecosystem, and well-established infrastructure and logistics support systems.

 

Tamil Nadu already accounts for 70 per cent of India’s total EV two-wheeler production, with a current manufacturing capacity of 10 million units. Industry experts attribute the state’s edge to its ecosystem of over 1,500 factories producing auto and auto components, which allows new players to integrate seamlessly. In the two-wheeler segment, three of the top five EV manufacturers – Ola Electric, TVS Motor, and Ather Energy – are based in the state.

 

Tamil Nadu has attracted significant EV investments in 2024. These include Vietnamese EV maker VinFast’s planned $2 billion plant, Tata Motors-JLR’s Rs 9,000 crore facility, Hyundai’s Rs 20,000 crore expansion, Royal Enfield’s Rs 3,000 crore plans, and Stellantis’s Rs 2,000 crore expansion.

 

In April, Citroen became the first multinational car manufacturer in India to export domestically produced EVs to the international market, shipping its Ë-C3 model manufactured in Tamil Nadu.