The country’s fourth-largest automaker, Mahindra and Mahindra (M&M), is in talks with the government of Kerala to set up an electric vehicle (EV) manufacturing unit in the southern state, known for its higher EV penetration.
On Friday, a Reuters report indicated that the Indian automaker and China's Shaanxi had agreed to set up a $3 billion joint venture to build a car manufacturing plant in Gujarat and were awaiting New Delhi's approval. Later, the company clarified that the report was "unfounded."
"Discussions are ongoing. Some companies from outside the country are coming to Kerala because it is the largest EV market. We are focusing on it. Mahindra is coming for some discussions next week," Kerala Industries Minister P Rajeeve told Business Standard. If the talks are successful, this could become a huge boost for the industrial sector in Kerala, ahead of its planned Global Investment Meet (GIM) in February next year.
Interestingly, this comes at a time when the state is in the top spot in terms of passenger vehicle EV penetration at 5.2 per cent, higher than 3.2 per cent in Delhi and 3.1 per cent in Karnataka, according to a report by BNP Paribas. Electric two-wheeler penetration is also the highest in Kerala at 13.5 per cent, ahead of Karnataka with 11.5 per cent, Maharashtra with 10.1 per cent, and Delhi with 9.4 per cent.
This time, the state also has the added advantage of having a container port like Vizhinjam. "As far as EV sector sales are concerned, Kerala is number one. We have already created an ecosystem for charging. Now, we have a state-owned company that has produced an electric auto in the country called Kerala Automobiles Ltd. Now, we are discussing with some companies to start their manufacturing units," Rajeeve added. An M&M official declined to comment on its plans for Kerala.
Ahead of the GIM, the state will conduct roadshows in Chennai, Bengaluru, Mumbai, and Delhi, showcasing the state's potential. The government is planning to develop Kerala as a high-tech hub within 10-15 years. "We are focusing on knowledge-based industries. Our strength is highly skilled human resources," the minister added. The state has already zeroed in on 22 knowledge-based sectors, including generative AI, blockchain technology, data analysis, machine learning, robotics, and nanotechnology, among others.
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"We have identified 22 priority sectors based on our advantages and disadvantages. Land space is very limited—1.2 per cent of the total landscape of the country and 2.8 per cent of its population. However, we are contributing 4 per cent of the GDP of the country. We are the ninth-largest economy in the country, and our per capita income is very high," he added.
Earlier in the day, M&M issued a clarification, calling the reports on its Gujarat plans untrue. "As there has been some unnecessary speculation raised by the Reuters article, the company considers it necessary to clarify to the stock exchanges that the article is unfounded and there is no truth in the matter," M&M informed the stock exchanges.