Indian sports utility vehicle and tractor maker Mahindra & Mahindra (M&M) plans to introduce electric variants of each of its passenger vehicle models. This means apart from its electric vehicles eVerito and e2O, Mahindra will have electric versions of the Scorpio, Bolero, XUV and TUV models, among others.
Mahindra is already India’s leading electric four-wheeler maker by sales and the strategy to widen its electric portfolio signals the big bet it is making on battery-powered vehicles — in line with market expectations of a likely explosion in demand for such vehicles. (The other two bets of Mahindra are on autonomous vehicles and ride-sharing.)
“Almost all passenger vehicles in Mahindra’s portfolio will have an electric variant… Plans for the electric Scorpio and XUV are already on. Others will follow,” a top official in M&M told FactorDaily.
The strategy will allow M&M to have an electric fleet from entry-level mini cars to expensive SUVs. At the entry level, there are the Reva e2Os and at the top of the Mahindra line, there will be the XUV500, expected to be launched by 2020.
Vehicles from Korea’s Ssangyong Motor Co., an M&M unit, may also be on the cards. “We are also in the process of evaluating more vehicles from the M&M and Ssangyong stables to electrify but the market demands will determine the resultant launches. The commercial vehicle segment of the portfolio will also be determined by the market evolution in the near future,” Mahesh Babu, CEO of Mahindra Electric said in an emailed response.
Mahindra Electric is investing over Rs 600 crore “which will be utilised for developing technologies, products, mobility solutions and scaling up manufacturing capacity. The investment on respective vehicle platforms will be over and above this,” Babu added.
Pawan Goenka, executive director of M&M had told this reporter earlier that it is working with Pininfarina for an electric luxury car. Pininfarina is the Italian car design company that subsidiary Tech Mahindra acquired in 2015. This M&M product, already being compared to Tesla vehicles, will be badged Pininfarina. Goenka had said that the comparison should be done with Tesla once the M&M car is out in the market.
However, a second source said it is not clear if the same electric vehicle-per-model philosophy will be followed in the commercial vehicles space. “There are a couple of electric vehicle models in the commercial space, but we are unsure how will the commercial vehicle strategy pan out for Mahindra. It makes a lot of sense to have electric buses, though,” the source said. Babu confirmed M&M is “evaluating and developing the eBus and eAuto which will be launched soon”.
With its current portfolio of electric vehicles, M&M sells around 2,500 electric vehicles a year (2,300 in 2016). That is tiny in the three-million-a-year Indian cars market but the company is the only major original equipment maker to sell all-electric cars in India.
Analysts believe that M&M can leverage its first-mover advantage with India’s ambition of being an all-electric car market. “It is a huge differentiator when the government is moving towards electric vehicles. It is a strategy which is somewhat hedged for M&M. They are not making a shift to EV, but balancing the act towards electric vehicles,” said Anil Sharma, senior analyst with London-headquartered consultancy IHS Markit.
Nitin Gadkari, India’s minister of road, transport and highways, has said that by 2030 India will an all-electric-car nation.
Last year, Anand Mahindra (whose picture is at the top of this story), chairman of the Mahindra group, talked of the shift in the market. “Seven years ago, we bet that EVs would be the future and acquired the REVA Electric Car Company – which was then, the only player in the EV space. Today, your company has several feasible models. Government policy is now backing this bet as well,” he told shareholders in August 2017. “That doesn’t mean that petrol and diesel cars are going to disappear tomorrow. But change will come and your company will be leading it.”
The biggest barrier to convert India into an electric car nation is the high cost of development and manufacturing electric vehicles — with batteries making up to 50% of the car. M&M is looking at bringing down the cost of electric vehicles and making them affordable. The cheapest e2O comes at Rs 5.96 lakh, which the entry price of a Maruti Suzuki Alto is Rs 2.45 lakh.
Having an electric variant of existing models brings down the cost. “These vehicle models are present in the Indian market for a long time. The cost of the platform and has been amortised over time. That is the cost arbitrage which M&M can amortise as a window of opportunity,” said Sharma.
“As the prices of batteries for electric vehicles come down, electric vehicles will be far more economical to run than conventional ones for ride sharing applications,” Mahindra had told shareholders.
However, Sharma pointed to the fact that among India’s biggest carmakers are subsidiaries of large multinational companies such as Suzuki and Hyundai. These companies are developing electric vehicle platforms and cars in their own countries. Bringing those to India won’t be difficult.
Among Indian automakers, Mahindra is a leader but that doesn’t count much in the larger scheme of things. “I wouldn’t compare the R&D budget of Mahindra with Suzuki or Hyundai. Mahindra doesn’t have half the presence of Suzuki,” said Sharma.
While Hyundai plans to bring some high-end electric cars to India, Suzuki’s plans are still in its initial stages. “It’s early days for electric cars in India. We will have to see how this develops in the years to come… three years is a long time ahead,” R C Bhargava, chairman of Maruti Suzuki, told FactorDaily. Maruti officials have said earlier that by 2020 the company will roll out its electric vehicles in India.
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Updated at 5.55pm January 11, 2018: Comments of Mahesh Babu, CEO, Mahindra Electric have been added to the story.
Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.