The Tamil Nadu government plans to develop a new auto cluster from scratch at Thoothukudi in southern Tamil Nadu due to the EV manufacturing project of VinFast and to support future auto investments.

“Chennai is a very big cluster in the automotive sector. We are also focusing on Coimbatore and Hosur. There will be a 4th cluster that the government is forming. With VinFast coming in and many other industries making investments, we are developing Thoothukudi to be another auto cluster and we’re starting from the ground up there, Thiru Srinivasan, Senior Advisor – Electric Vehicle Sector, FameTN said at a conference here.

VinFast unit

Vietnam-based electric vehicle maker VinFast is establishing a new integrated EV manufacturing unit at Thoothukudi where the company has planned to invest ₹4000 crore, spread over 5 years. The upcoming EV unit is expected to have an annual capacity of up to 150,000 units.

Srinivasan said the state is also planning to set up two more common facilities and infrastructure for EV battery and vehicle testing.

“In the last 2 years, we took a lot of help from World Resources Institute - India (WRI) in working with the Coimbatore group, and that’s how the first common facilitation  centre for motors and power electronics in Coimbatore was developed. We are now looking at a similar cluster in Chennai for battery and cell areas. We are also looking to develop a cluster potentially at Hosur for vehicle testing,” he added.

EV Taskforce

Srinivasan said the EV Taskforce of the state government is starting discussions with all stakeholders of the EV industry and there would be a bigger focus on building an ecosystem for motors, batteries, and power electronics.

“We are also in discussions with several people who are going to be establishing recycling centers in the state and they see more opportunity than we even realised. We will start to see a significant amount of activity in the next 3-4 months. We expect is to double the amount of local sourcing,” he added.

Discussing the state’s focus on the EV sector, V Arun Roy, Secretary Industries, Government of Tamil Nadu said the state was actively developing a strategy to cater to the increasing electricity demand not only from the mobility sector but also related to the greater development of Tamil Nadu.

‘ICE to EV’

Earlier, a report titled “ICE to EV: Just Transition Roadmap for India’s Automobile Sector” prepared by The International Forum for Environment, Sustainability and Technology (iFOREST), a non-profit environmental think tank, was released.

The report pointed out that about 20 per cent of the 759 auto component manufacturers in the Hosur cluster that were analysed for the report would be highly or moderately impacted by the ICE to EV transition. Most of these enterprises make parts for ICE powertrain sub-assemblies. Further, of the 759 enterprises, MSMEs make up 95 per cent. These enterprises remain particularly vulnerable, given their limited financial resources and capacity for technology adoption.

“A strategy for transitioning to EVs will need to be tailored for each cluster, considering their specific profiles and the scale of businesses within them”, it said.