Tamil Nadu emerging as country's electric two-wheeler hub

With electric two-wheeler manufacturers lining up to set up manufacturing bases in Tamil Nadu in the past several weeks, the state is emerging as the hub of this new generation of eco-friendly and pocket friendly transportation.

The companies to announce setting up manufacturing bases in this southern state include Ola, Ampere Electric, Srivaru Motors, Ather Energy, PI Beam.

Though current sales of electric vehicles sales present modest figures – 3,511 electric vehicles were sold in April-December 2020 – the country is set to witness a very fast growth in the number of two wheeler manufacture and sales.

According to a survey by JMK Research and Analytics published in June 2020, the more than 20 lakh electric two wheelers would be sold in the country in the next five years. The share of e two wheelers is projected to jump from 0.7% in 2020 to 6%-15% in five years.

As things stand now, the factory that Ola is setting up in Tamil Nadu is supposed to produce 20 lakh vehicles in the initial phase itself.

The popular brands of electric vehicles (four wheelers) are Tata Nexon EV, MG ZS EV, Tata Tigor and Hyundai Kona.

The popular two-wheeler brands are TVS, Hero Electric, Ather Energy, Revolt Motors, Okinawa.

The Society of Manufacturers of Electric Vehicles (SMEV) thinks that though the sale of electric vehicles constitute less than 1% of the total vehicles sales in the country, it can rise to 5% in a few years.

SMEV says there are more than 5 lakh electric two-wheelers and a few thousand electric cars on Indian roads.

“More than 90% of electric vehicles on Indian roads are low-speed electric scooters (less than 25km/hr) that do not require registration and licenses,” SMEV said.

The industry also has a huge potential for employment generation. Job opportunities in the electric vehicle industry are expected to grow in the areas of scientific research (chemical engineers, material engineers), design and development (industrial engineers, mechanical, electronics, electrical engineers, software developers), manufacturing (electrical and electronic equipment assemblers, electromechanical assemblers, CNC tool operators, mechanists, industrial production managers), maintenance (mechanics, technicians) and infrastructure (powerline installers, repairers, electricians).

The jewel in Tamil Nadu’s crown is Ola Electric Mobility that has inked a memorandum of understanding to build what is supposed to produce 20 lakh vehicles initially in a year and eventually become the largest scooter plant in the world producing 1 crore vehicles annually.

Entailing an investment of Rs 2,400 crore, this unit is expected to generate 10,000 jobs.

The factory and a clutch of ancillary units are spread over a plot of 500 acre in Krishnagiri district.

Ola Electric was set up in 2017 and is the electric vehicle (EV) arm of transportation aggregator company Ola. Its decision to step into Tamil Nadu comes as a juncture when the Centre is trying to promote manufacture of electric vehicles and components in the country.

Ampere Vehicles, the electric vehicle manufacturing wing of Greaves Cotton has also drawn up plans to invest Rs 700 crore in the next 10 years to set up a factory in the state.

The unit will be spread over 14 lakh square feet and would have a capacity to produce 1 lakh vehicles in the first year itself. The factory would be completed this year.

At the other end of the spectrum is an IIT Madras-incubated start up PI Beam that has launched an electric two wheeler in the second week of February.

The vehicle that the company claims can be charged faster than a cellphone can be run for about 50 km on a single charge.

As much as 90% of the components of the PI Beam product are made in India and the company hopes to sell 10,000 units by March 2022.

In February 2021, another plant in Hosur began production of electric two wheelers. Bangalore-based e scooter manufacturer Ather Energy has started manufacturing vehicles 14 months after it signed an MoU.

Significantly, Sachin Bansal of Flipkart was a member on the board of this company where he made an angel investment of $5 lakh in 2014.

The factory that is supported by the state’s electric vehicle manufacturing police is manufacturing both vehicles and lithium ion battery that is a critical component for the vehicles.

Another local start up based in Coimbatore launched its product, an electric bike, quietly during the pandemic. Srivaru Motors that unveiled its debut model Prana in July 2020.

Prana would come in three variants Elite, Grand and Class. In the top-end Elite variant, the target is to achieve 0-60 km per hour acceleration in under three seconds. The riding range in this variant could be 225 km.

Mohanraj Ramaswamy, the entrepreneur behind Srivaru Motors, is an engineer who has worked in a few automobile companies including Tesla. To push the green positioning, he has devised a plan whereby a buyer would get a discount of Rs 26,000 on the price of Rs 2.25 lakh of the Grand model if he/she plants 10 trees before taking delivery of the bike.

Experts expect battery prices to dip $100/kWh in 2024 that is viewed as a major disruptive positive influence in the market.

The flurry of activities follow Tamil Nadu’s aggressive promotion of this futuristic segment that began with announcement of the electric vehicle policy in 2019. The policy highlighted investment subsidy and waiver of various taxes and duties for investors.

The policy said manufacturers of battery and charging infrastructure investing a minimum of Rs 50 crore and employing a minimum of 50 people would be given concessions of 15% and 20% capital subsidy for manufacturing electric vehicles and batteries.

The policy also included subsidy on land cost and waiver of stamp duty on purchase of land. The buyer also stood to benefit since the government announced full motor vehicle tax exemption for anyone buying electric vehicles of any type till the end of 2022.

In March 2017, the Society of Manufacturers of Electric Vehicles requested the Tamil Nadu government to give a push to the use of electric two-wheelers, under the Amma scheme.

Under the Amma scheme it was decided that one lakh women would get government subsidy up to 50% of the cost of a two-wheeler, subject to a maximum of Rs. 20,000. The idea was to empower the women. A sum of Rs 200 crore was allocated for the scheme in 2017-18.