Tamil Nadu is an indispensable part of India's electric-vehicle (EV) story. The state produces more than half of the country's electric two-wheelers and roughly 40% of its total EV output, cementing its status as the leading hub for electric-mobility manufacturing. Long recognized as an automotive powerhouse, Tamil Nadu has seamlessly adapted to the shift toward electrification, drawing investments from both domestic manufacturers and global players, most recently Vietnam's VinFast.
The broader market reflects this momentum. EV adoption in India continues to accelerate as consumers embrace cleaner, more economical mobility options, while manufacturers expand their product portfolios. In May, battery-powered vehicles crossed the 10% penetration mark for the first time, signaling that electric mobility is steadily entering the mainstream.
Manufacturing Ecosystem and Key Players
Tamil Nadu's EV ecosystem boasts an impressive lineup of manufacturers across vehicle segments. In two-wheelers, TVS Motor, Ola Electric, Ather Energy, Greaves, Raptee Energy, and more recently Royal Enfield have transformed the state into one of India's largest EV production hubs. Hyundai, BYD, and VinFast anchor passenger-vehicle production, while Switch Mobility and Montra Electric have made the state a key base for electric buses, trucks, and last-mile mobility solutions. Mahindra Research Valley near Chennai further strengthens the state's EV engineering and R&D capabilities.
"By almost any manufacturing metric, Tamil Nadu has emerged as India's EV capital," says Kaushal Kumar Jha, CEO of NoonRay Energy and Adjunct Professor of Engineering Design at IIT Madras. However, industry representatives argue that the state's next phase of growth will depend less on vehicle assembly and more on its ability to build a robust ecosystem. "The next challenge is moving up the value chain into deep-tech capabilities that generate higher economic value and technological independence," he adds.
Strengths and Gaps in the Value Chain
Tamil Nadu already enjoys significant strengths inherited from its decades-old automotive industry. Wiring harnesses, automotive electronics, and engineering services have a strong presence, while battery-pack assembly capabilities have matured. Startups from the IIT Madras ecosystem are advancing charging, battery, and powertrain technologies.
However, critical parts of the value chain continue to depend heavily on imports, particularly battery cells, power electronics, and advanced vehicle software. Thiru Srinivasan, CEO of the Centre of Excellence in Advanced Automotive Research (CAAR), says the state trails competitors such as Pune and Bengaluru in several areas of EV component development. "The EV component ecosystem in TN has not developed very well. Pune seems to be ahead, while Bengaluru stays ahead in terms of engineering work," he notes.
According to him, policy attention has largely focused on attracting large investments and Global Capability Centres (GCCs), while mid-sized enterprises and MSMEs—traditionally the backbone of the automotive supply chain—have not received sufficient support. "TN government has focused on large investors and GCCs, not in promoting mid-level and MSME-level companies. This is the heart of the component ecosystem," he says.
Several traditional auto parts groups have taken a cautious approach toward EV investments, slowing the emergence of a robust local supplier base. Industry experts broadly agree that battery cells, the single largest cost component in EVs, remain the biggest gap in the value chain. Although efforts are under way to localize cell manufacturing and battery materials, the ecosystem is still nascent. Srinivasan says Ola Electric has taken an early lead in cell manufacturing, while Harendra Saksena, Chief Procurement Officer at Ather Energy, sees significant opportunities across cell manufacturing, battery production, and upstream technologies.
"Traditional internal-combustion-engine suppliers established in Tamil Nadu are contributing to and transitioning toward the EV ecosystem. However, there is significant scope to grow in critical EV supply-chain segments such as cell manufacturing, battery production, and upstream technologies," says Saksena.
The Software Challenge
Interestingly, Jha believes that one of the biggest challenges facing Tamil Nadu is not hardware manufacturing but software development. The state possesses strong engineering talent and research capabilities through institutions such as IIT Madras and specialized research centers. The difficulty lies in commercializing these innovations into automotive-grade products, he says.
Battery Management Systems (BMS) illustrate the challenge. While hardware capabilities exist, the state still lacks sufficient firms capable of developing production-grade firmware that meets automotive safety and performance standards. Srinivasan shares a similar view: "Much of the capability building in BMS and related areas is happening in Bengaluru and Pune rather than Tamil Nadu, though there are some promising startups here."
Saksena, however, sees a significant opportunity for Tamil Nadu. "Leveraging the significant engineering talent pool available, developing advanced BMS technologies presents a strategic opportunity to create a sustainable competitive advantage for the country," he says.
He also points out that significant localization has been observed in cells and their upstream chemicals, particularly cathode active materials and anode materials. Domestic capabilities are improving in power electronics, including motor controllers, inverters, onboard chargers, and DC-DC converters. Traction motors are another area where progress has been visible, thanks to players such as Sona Comstar. Efforts in Coimbatore have also helped develop traction-motor capabilities, though these remain far from adequate.
Jha points out that Tamil Nadu's Semiconductor and Advanced Electronics Policy 2024 provides a strong platform to accelerate local semiconductor packaging, particularly in silicon carbide (SiC) and gallium nitride (GaN) technologies, helping bridge the gap in the power electronics segment.
Future Strategy for Sustainable Growth
Industry experts suggest that Tamil Nadu's next phase of EV growth will require a different strategy from the one that helped it emerge as a manufacturing leader. "TN needs to continue pursuing big investors, but it must also focus on developing engineering companies, component manufacturers, MSMEs, raw material suppliers, and recycling companies," says Srinivasan.
Jha believes the state should focus on five priorities: creating predictable demand through government and fleet procurement, supporting supplier retooling, establishing shared testing and certification infrastructure, building a software-first EV ecosystem, and accelerating battery localization.
Tamil Nadu has already become an EV manufacturing capital. The next phase will be harder. Assembly lines can be built with capital; technological depth takes longer. If the state can build competitive capabilities in batteries, semiconductors, software, and advanced electronics, it could emerge as one of Asia's most important electric-mobility and deep-tech clusters.
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