If we were to draw a graph of people / management knowledge (PMK) on one side, and job / technical knowledge (JTK) on the other side, would you agree that on the individual contributor level, about 90% of this person's success is coming from his JTK and only 10% from his PMK? In other words, he needs to get along with the people in front of him and behind him, etc. What happens when you make him the team lead, as you are planning? Now, about half of his job comes from running other people. Obviously, he still needs JTK, but you are really going to evaluate his performance on getting results through other people. As you move him up into middle/upper management, almost all of his job is coming from his ability to manage and get results through other people and very little of his success is going to be from JTK.
In other words, where is it that they pick up the 40 to 90% more people / management skills they need to succeed? In many organizations, the transition from individual contributor to team lead consists of being called into the boss’s office on a Friday afternoon and finding out that you are going to be named a team lead, having a big dinner at your mother-in-law’s on Sunday, and effective Monday, taking over running the team. What is the cost in real dollars of grievances and employee complaints and dissatisfaction because we haven’t taken the time to really give people the kind of training and development they need in order to succeed in their new role?
You have to evaluate if he has the aptitude, passion, and attitude to become the team lead? Maybe he wants to progress on the technical side rather than becoming a manager. Have you considered that? If he wants to become a team lead then you need to support him, coach / mentor and provide necessary training and development to help him succeed. It is a big responsibility but, that is the right thing to do so that he, you and your organization will all win. Good luck.