Mahindra charged up on electric cars

With the government's ambitious plan to have all vehicles sold beyond the year 2032 to be electric, Mahindra & Mahindra (M&M), which has so far invested Rs 600 crore in the segment, aims to expand it in the next 2-4 years and has come up with plan EV 2.0.

Though M&M's immediate plan for the electric segment is to develop vehicles for mass mobility, there is also a blueprint for developing high-end niche products at a later stage, which would primarily be for foreign markets.

The company's push for electric vehicles (EVs) comes in the backdrop of government's push, which expects around 5 million units of electric vehicles to be sold in around next 15 years.

As per a report released by Centre's think tank Niti Aayog earlier this month, the accelerated adoption of electric and shared vehicles could save about $60 billion in diesel and petrol costs while cutting down as much as 1 gigatonne (GT) of carbon emissions for India by 2030. This would result in an annual reduction of 156 million tonne in diesel and petrol consumption, making a net fuel cost saving of approximately Rs 3.9 lakh crore.

Though the idea of EVs has been talked about for the past several decades, it has largely remained unviable due to the high battery cost, which forms around a third of the total cost.

As per an industry estimate, mere 0.5 million of EVs were sold globally last year. It is only in the past few years that the segment has started gaining popularity thanks to tech firms like Tesla which are offering luxury electric cars.

On M&M's plan christened as EV 2.0, Pawan Goenka, chairman, Mahindra Electric, said that the push for the segment will come first from the fleet operators, which will then encourage individuals and others to follow suit.

The company is in talks with around half a dozen fleet operators for the adoption of electric vehicles, while three aggregators are already using their existing products.

M&M had made its first serious bet on EVs when it acquired the Bengaluru-based Reva Electric car company in 2010. The company at present has a portfolio of four products in the form of e2o Plus hatch, eVerito Sedan, eSupro mini van, and panel vans.

"At present, we assemble around 400-500 batteries at its Bengaluru plant. In a leap of faith, considering the expected growth in the segment, we have plans to expand the capacity to over 5,000 units within next 2-3 years," said Goenka, who is also the MD of Mahinda and Mahindra (M&M).

The assembly expansion will take place at the company's Chakan plant in Pune, where a significant investment has been made in this regard.

The company has also tied up with IIT (Madras) to develop the technology for the EVs and not just depend upon the imports.

Meanwhile, the company plans to launch three-wheelers in the next few months while a 32-seater bus is next in line in around a year-and-half.

With regard to developing high-end cars, the company plans to develop the same with its Italy-based partner Pininfarina and SsangYong Motors, the foreign companies in which it owns a majority stake.

Commenting on the practicability of implementation of Niti Aayog's plan, Goenka said that it can happen only after about 20% reduction in price to make vehicle purchase viable on per kilometre basis.

"Plus, instead of giving any more subsidies, the government should instead be steady on its policies for next few years which will give confidence to the OEMs, suppliers and others to invest in the segment," he added.

Further, the government should also make rules easier to register these vehicles as the company recently found it very difficult to get its eVerito Sedan car registered.

"In one of the states, it took about six months for us to convince RTO that there can be no CC to the engine of the electric car."

According to Goenka, infrastructure development for EVs in the form of charging stations is still a challenge and original equipment manufacturers cannot be expected to create the charging infrastructure as it will be used for all brands. Instead, charging companies or government will have to pitch in for that.