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Royal Enfield plans to set up a new factory in Tamil Nadu to expand its product portfolio as well as diversify into electric vehicles. According to sources, Royal Enfield has already acquired a 60-acre land parcel in Cheyyar, on the outskirts of Chennai. There are plans to invest between Rs 1,000 crore-1,500 crore in the next 12-24 months, depending on the manufacturing capacity that they finalise on.
New plant to cater to ICE and EV bikes
Plans to invest $100-$150 million in EVs
The new factory will cater to producing new Royal Enfield internal combustion engine (ICE) motorcycles; a portfolio that’s been expanding steadily. Following the recent launch of the Super Meteor 650 and the alloy wheel equipped Interceptor/Continental GT 650, the company is gearing up to launch the Shotgun 650 and the highly anticipated Himalayan 450. The first bike is likely to roll out from a dedicated set-up within the existing Vallam Vadagal plant – which is its core IC engine production base. It is learnt that the company has already commenced work at the Cheyyar plot to ensure a smooth transition to EVs as and when the models are developed and ready for rollout.
At present, Royal Enfield’s existing plants in Oragadam and Vallam Vadagal have a combined manufacturing capacity of over a million units per annum, which is capable of meeting the growing demand for the next few years. The expected recovery in the domestic two-wheeler market, RE’s aggressive global expansion and its diversification into EVs calls for the company to be future capacity-ready.
The 60-acre plot of land in Cheyyar, meanwhile, has been acquired to move some of its activities from the Thiruvottiyur facility – operating since 1995 – which has become a thriving residential area. According to sources, the company may spend about Rs 100 crore-150 crore in ground-laying work, with the factory coming up only by 2025.
An email sent to Royal Enfield seeking its response did not elicit any response till the time of this report being published.
Royal Enfield electric motorcyles
Meanwhile, Royal Enfield has already set up a dedicated EV team led by Umesh Krishnappa, who is the CTO steering the project. The company is working on two different EV architectures – an in-house-developed (codename L1A) EV, which is likely to hit the roads in FY2024-25, and alternatively, utilise the EV platform of Stark Motorcycle, a Spanish EV start-up in which Royal Enfield’s parent Eicher Motors acquired an equity stake.
Our sister publication, Autocar Professional had exclusively reported, in early February 2023, that Royal Enfield plans to invest about $100-150 million for EVs. Developmental work on a dedicated L platform has begun with plans to produce three different models with a combined potential of 1,20,000-1,80,000 units per annum.
The L platform is being designed factoring a global audience in addition to the emerging electric motorcycle market in India. The prototype is expected to be ready in the next 12 months, with the company wanting to get the EV validated before end-2023 to be ready for a market launch in 2024. We had, in fact, reported on the first images of Royal Enfield’s electric motorcycle in November last year.
These developments happen at a time when Royal Enfield’s ICE rivals Bajaj Auto, TVS Motor and Honda Motorcycle & Scooter India have already defined an ambitious EV foray. Royal Enfield, however, wants to execute its plans with a “steady surefootedness”.
Siddhartha Lal, managing director of Eicher Motors, has always maintained that the company does not envisage being the first mover and is fine with entering the EV market later with a different offering.
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