Every day at 4 p.m., a little tea stall in Maharashtra’s Sambhajinagar (formerly Aurangabad) turns into an informal conference centre for EV makers and their vendors.

Right outside the city’s newest industrial zone, Aurangabad Industrial City (AURIC), they swap stories about production, land allotments, and their next big orders over glasses of strong ginger-laced tea as their phones buzz with factory updates. This scene has been playing out for decades in this city located about 350km east of Mumbai.

These young vendors are old friends. Their fathers built component factories around Sambhajinagar years ago, and now, the second generation is scaling them up for EVs.

“Sambhajinagar’s EV ecosystem is being built with dad’s money, not VC funding,” said Dilip Dharurkar, managing director at NAC Group, a nearly three-decade-old auto-components firm in the city.

India’s EV story has long been associated with Hosur, a small industrial town in Tamil Nadu that shares its borders with Bengaluru and relies heavily on incentives. Some of the early EV entrants—the likes of Ola and Ather—are churning out thousands of vehicles every year from their big factories. But that success, and the subsequent rising production costs, are now testing the corridor’s limits.

Meanwhile, Sambhajinagar, with fresh incentives of its own, offers something more. Besides the cheaper cost of production, the city has a generational vendor ecosystem where capital, skills, and succession already exist. And that’s what companies are betting on now.

The legend of Sambhajinagar—that every automotive product in India has a link to the city—helps, too. A senior official from Toyota Kirloskar Motor, who went there with a delegation in early 2024, had certainly heard of it.

The company was scouting sites for its next major manufacturing plant, targeting an annual production of 400,000 vehicles, both electric and internal combustion. The delegation expected a standard site visit. What they got instead was an unscripted campaign.

A group of young industrialists—most with no direct link to EVs or automotive—offered to show the team the city’s workshops, R&D centres, and even other companies’ factories. What stood out, said the official, was their willingness to adapt to new tech and the hunger for work across industries.

“They weren’t selling us on incentives, but the city,” he added.