Bajaj Auto Eyes New Manufacturing Plant In South India; Tamil Nadu And Telangana Emerge As Front-Runners

Bajaj Auto is evaluating Tamil Nadu and Telangana as potential locations for its next manufacturing facility in what could become one of the company’s biggest expansion moves in recent years. While the automaker has not officially confirmed the investment or the final location, industry reports suggest the proposed facility will primarily support the company’s rapidly growing electric vehicle business while also leaving room for future expansion into conventional internal combustion engine (ICE) products.

The proposed investment highlights Bajaj Auto’s aggressive growth ambitions as demand for electric two-wheelers and electric three-wheelers continues to rise across India. It also reflects the increasing competition among Indian states to attract large-scale automotive manufacturing investments.

Why Bajaj Auto Needs A New Plant

Bajaj Auto has significantly strengthened its position in India’s electric mobility market over the past year.

Its Chetak electric scooter has emerged as one of the country’s fastest-growing premium electric scooters, while the company has also expanded aggressively in the electric commercial vehicle segment through products like the GoGo electric three-wheeler and Riki e-rickshaw.

Current manufacturing operations include:

• Chakan, Maharashtra – Chetak electric scooter production

• Chhatrapati Sambhajinagar (Aurangabad), Maharashtra – GoGo electric three-wheelers and Riki e-rickshaws

• Pantnagar, Uttarakhand – Motorcycle production

With EV demand continuing to grow, Bajaj Auto is now looking to create additional manufacturing capacity that can support both domestic sales and export opportunities.

Maharashtra Subsidy Issue May Have Triggered The Search

One of the major factors behind Bajaj Auto’s reported expansion outside Maharashtra is the delay in receiving electric vehicle subsidies.

According to industry reports, the Maharashtra government reportedly owes Bajaj Auto more than ₹70 crore in pending EV subsidy reimbursements. While the company has not officially linked its expansion decision to these dues, the issue has become an important consideration as the company evaluates future investments.

This situation demonstrates how policy certainty and timely incentive payments are becoming increasingly important in determining where manufacturers establish future production facilities.

Tamil Nadu Has Strong Manufacturing Advantage

If Bajaj Auto chooses Tamil Nadu, it would gain access to one of India’s strongest automotive ecosystems.

The state already hosts manufacturing operations for several major OEMs including:

• Hyundai Motor India

• Tata Motors

• Renault

• TVS Motor

• Royal Enfield

• Yamaha

• Daimler Truck

• Stellantis

• Ola Electric

• VinFast (upcoming)

The automotive corridor stretching from Hosur–Ranipet–Sriperumbudur–Oragadam–Maraimalainagar offers:

• Mature supplier ecosystem

• Skilled manufacturing workforce

• Excellent highway connectivity

• Access to Chennai and Ennore ports

• Established EV component suppliers

These advantages can significantly reduce production costs while improving logistics efficiency for both domestic and export markets.

Telangana Wants To Become A Major Auto Hub

Telangana, meanwhile, is positioning itself as India’s next automotive investment destination.

Although its manufacturing ecosystem is smaller than Tamil Nadu’s, the state has been aggressively promoting investments in mobility, electronics and advanced manufacturing.

Current automotive presence includes:

• Mahindra & Mahindra’s Zaheerabad facility

• ZF Technology Centre

• Hyundai’s engineering and R&D operations

The state has also built a strong reputation for:

• Faster project approvals

• Technology-focused industrial policies

• Modern infrastructure

• Growing EV ecosystem

Winning Bajaj Auto’s investment would significantly strengthen Telangana’s automotive manufacturing profile.

What Will The New Plant Build?

At present, Bajaj Auto has not disclosed the production plan for the proposed factory.

Industry observers believe the facility could manufacture:

• Electric scooters

• Electric three-wheelers

• Future electric motorcycles

• Selected ICE motorcycles

• Export-oriented products

The final product mix will likely depend on future market demand, government incentives and the company’s long-term electrification roadmap.

A Wider Trend In India’s Auto Industry

Bajaj Auto’s expansion plans reflect a broader shift across India’s automotive industry.

Rather than concentrating manufacturing in a single state, automakers are increasingly diversifying production locations to:

• Reduce supply chain risks

• Improve regional logistics

• Access different labour pools

• Benefit from state-specific incentives

• Enhance business continuity

Recent examples include:

• Hyundai’s acquisition of the Talegaon plant in Maharashtra despite its long-standing Tamil Nadu presence.

• Royal Enfield’s decision to establish a new manufacturing facility in Andhra Pradesh while continuing operations in Tamil Nadu.

This diversification strategy is becoming increasingly common as manufacturers prepare for higher EV production volumes and evolving supply chains.

What It Means For India’s EV Industry

If Bajaj Auto establishes a new southern manufacturing facility, the investment could:

• Increase domestic EV production capacity.

• Generate thousands of direct and indirect jobs.

• Strengthen India’s EV component ecosystem.

• Improve export competitiveness.

• Intensify competition among states for automotive investments.

The move would also reinforce Bajaj Auto’s commitment to electric mobility at a time when competition in India’s electric two-wheeler market continues to intensify.

Auto Punditz View

Bajaj Auto’s search for a new manufacturing base goes beyond adding production capacity—it reflects the changing priorities of India’s automotive industry. Companies are increasingly evaluating not just supplier ecosystems and logistics, but also policy stability, incentive disbursement, and long-term investment support.

Tamil Nadu offers an unmatched manufacturing ecosystem built over decades, while Telangana presents an opportunity with proactive governance and a technology-driven industrial approach. Whichever state secures the investment will gain a major boost to its automotive and EV ambitions.

With India’s electric mobility market entering its next phase of growth, Bajaj Auto’s eventual decision could become one of the most significant manufacturing announcements in the two-wheeler industry this year.

Source