Mahindra and Mahindra (M&M), India’s fourth-largest automaker, is negotiating with the Kerala government to set up an electric vehicle (EV) manufacturing unit in the state, which is known for its high EV adoption rates. If successful, the project could significantly bolster Kerala’s industrial sector in anticipation of its Global Investment Meet (GIM) scheduled for February next year.

Kerala Industries Minister P Rajeeve confirmed the discussions, noting that the state’s position as a leading EV market is attracting interest from various companies. “Some companies from outside the country are coming to Kerala because it is the largest EV market. Mahindra is coming for discussions next week,” Rajeeve told Business Standard. 

An official from M&M declined to comment on the specifics of the company’s plans.

Kerala leads India in passenger vehicle EV penetration with 5.2%, surpassing Delhi’s 3.2% and Karnataka’s 3.1%, according to a BNP Paribas report. The state also tops the charts for electric two-wheelers with a 13.5% penetration rate, ahead of Karnataka (11.5%), Maharashtra (10.1%), and Delhi (9.4%).

The state’s advantages include the Vizhinjam container port and an established EV ecosystem, including a state-owned firm that has produced electric autos. “As far as EV sector sales are concerned, Kerala is number one. We have already created an ecosystem for charging. Now, we are discussing with some companies to establish manufacturing units,” Rajeeve said.