Larsen & Toubro is making a significant foray into the automotive components sector with a Rs 5,000 crore investment over five years, aiming to become a Tier-I supplier for electric vehicle motors, advanced driver-assistance systems, and connected-vehicle technologies.
Key Points
- L&T plans to invest Rs 5,000 crore over five years to establish a manufacturing hub in Tamil Nadu for EV motors, safety systems, and connected-vehicle technologies.
- The company aims to become a Tier-I auto supplier, targeting a 10-15 per cent market share in the industrial business-to-business electronics market, which is projected to reach $4.85 billion by 2031.
- L&T has already secured its first commercial order to supply 500,000 electric traction motors to a two-wheeler manufacturer over three years, with production starting soon.
- The company is developing ADAS specifically for Indian driving conditions, aiming to make it a mass-market feature, anticipating regulatory mandates from 2027.
- L&T is focusing on an IP-led manufacturing ecosystem, pursuing technology licensing, joint ventures, and startup investments to accelerate product development and achieve high localisation.
Larsen & Toubro (L&T) on Wednesday announced its entry into the automotive (auto) components sector, with plans to invest Rs 5,000 crore over the next five years to manufacture electric vehicle (EV) motors, safety systems, and connected-vehicle technologies at a new manufacturing hub in Tamil Nadu.
The initiative is being driven by L&T Electronic Products & Systems (EPS) business, headed by Prashant Chiranjive Jain, managing director of L&T Vyom and head of the company’s EPS group, and forms part of the conglomerate’s broader Lakshya 31 strategy.
Besides mobility, the EPS platform covers power electronics, robotics and automation, and electronic systems design and manufacturing, drawing on L&T’s long-established strategic electronics capabilities.
L&T's Strategic Vision and Market Opportunity
Jain dismissed suggestions that the move represented diversification for L&T.
“The DNA of L&T has been engineering across very diverse sectors from Day One,” he said, describing the company’s ambition to become a Tier-I auto supplier as a natural extension of its engineering capabilities rather than a departure from them.
L&T estimates the industrial business-to-business electronics market it is targeting at around $2 billion today, with the opportunity expected to expand to $4.85 billion by 2031.
The company is targeting a 10-15 per cent market share across the EPS portfolio, although it did not disclose a standalone revenue target for its mobility business.
The Rs 5,000 crore investment will be deployed over five years across manufacturing, research and development (R&D), technology licensing, testing infrastructure, and the development of an intellectual property (IP)-led electronics business, Jain said.
The investment comes as Indian auto component makers seek to move from predominantly mechanical products into higher-value electronics and software. Goldman Sachs estimates that India’s auto component industry will grow at an annualised rate of 10 per cent, from $86 billion in 2025-26 to $124 billion by 2029-30, driven partly by electrification and new opportunities in electronics and semiconductors.
It identified sensors, software, advanced driver assistance systems (ADAS), high-performance computing, controllers, and EV power electronics as key emerging product categories.
Innovation and Localisation Efforts
The brokerage, however, said Indian auto component companies spend only around 0.5 per cent of sales on R&D, compared with a global industry median of 3.1 per cent.
L&T’s emphasis on proprietary technology and engineering capabilities could therefore differentiate it from conventional domestic component manufacturers.
Jain said the first phase had already been commissioned, including a live printed circuit board assembly and box-build manufacturing line in Coimbatore, Tamil Nadu.
A dedicated motor manufacturing facility is expected to begin production in August-September, while a further G+2 expansion, forming part of an eventual 40-acre manufacturing campus, is targeted for completion by the end of the year.
The broader manufacturing ecosystem is expected to create around 5,000 direct and indirect jobs and will be supported by engineering and testing laboratories in Bengaluru and Coimbatore, as well as a battery energy storage system container integration facility near Chennai.
Jain said L&T would continue to pursue technology licensing, joint ventures, and investments in startups to accelerate product development.
Besides its licensing agreement with Israel-based EVR Motors, the company has already invested in a power electronics startup developing direct current-to-direct current (DC-DC) converters and remains open to additional partnerships and acquisitions.
“The idea is to create a strong IP-led manufacturing ecosystem,” Jain said, “rather than pure manufacturing at scale.”
First Customer and Product Portfolio
L&T's mobility business, led by Sudeepth Puthumana, has already secured its first commercial order — a contract to supply 500,000 electric traction motors to a two-wheeler (2W) manufacturer over three years.
Series production is scheduled to begin next month at its Coimbatore facility.
The motors are based on technology licensed from EVR Motors and use the company’s patented trapezoidal-coil architecture, which L&T says delivers higher torque density while reducing material use and package size.
According to the company, the motor has achieved nearly 98 per cent localisation by component count and around 70 per cent localisation by cost.
However, executives acknowledged that the high-performance version continues to rely on imported rare-earth magnets, although these are sourced from supply chains not subject to export controls.
The company is simultaneously developing a heavy-rare-earth-free alternative for lower-performance applications.
Goldman Sachs estimates that localisation in India currently stands at slightly above 50 per cent for electric car components and around 75 per cent for electric 2Ws, compared with about 90-95 per cent for internal combustion engine vehicles.
It said localisation of EV components represents a sizeable opportunity, although achieving the cost competitiveness and technological readiness of Chinese and South Korean suppliers will take time.
Beyond traction motors, L&T is building a portfolio comprising scalable motor control units, integrated “X-in-1” electric drive systems combining the motor, gearbox, and electronics, an India-specific ADAS platform, and 4G and 5G connectivity solutions being developed in collaboration with sister company L&T Semiconductor Technologies.
ADAS for Indian Roads and Charging Solutions
L&T is positioning ADAS as a mass-market opportunity rather than a premium feature.
Executives said nearly 80 per cent of vehicles on Indian roads currently lack driver-assistance systems, creating a significant opportunity as regulations mandating features such as automatic emergency braking for commercial vehicles take effect from 2027, with passenger vehicles expected to follow.
ADAS penetration currently stands at only 7-8 per cent.
Instead of replicating premium global offerings, the company said it is developing ADAS specifically for Indian driving conditions, including unmarked roads, mixed traffic, potholes, and stray animals.
On commercial vehicles, Jain and Puthumana acknowledged that EV adoption remained slow because fleet operators were focused on operating costs and concerned about the availability of highway charging infrastructure.
To address the constraint, L&T is developing a bidirectional 50-kilowatt DC-DC converter, scalable up to 1 megawatt, to support high-capacity charging infrastructure for long-haul applications.
