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Mahindra to expand electric vehicle line up, will invest Rs 8,000 crore for electric future

Mahindra & Mahindra is preparing new vehicles and investments while solidifying its production schedules as it continues to be “very optimistic” about the country’s steady shift toward the adoption of electric vehicles over the coming few years. A senior corporate executive claims that the Mumbai-based automaker anticipates the shift to electric mobility to occur gradually, with the fleet and sports utility vehicle segments slated to spearhead the change in the domestic market.

“Our internal research tells us that 25 per cent of the existing SUV buyers would like to consider an electric SUV as their next purchase. The research also tells us that over the next 2-3 years, we will see this kind of transition happening,” Mahindra & Mahindra Executive Director (Auto and Farm sectors) Rajesh Jejurikar told PTI in an interaction.

He noted that the company expects about 20-30 per cent of its SUVs to be electric five years from now percent of its SUVs to be electric. Betting big on green mobility, Mahindra has lined up five new electric Sports Utility Vehicles (SUVs), with the first four expected to hit the market between December 2024 and 2026.

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The automaker plans to roll out the five electric SUV models under two brands. XUV and the all-new electric-only brand called “BE.” Legacy brands will come under the XUV marque, while the all-new electric model would be rolled out under the “BE” brand.

Elaborating on the trends, Jejurikar noted that the electric penetration in the domestic market will start with households with multiple cars. “Also, the fleet segment will move very quickly to electric as it makes economic sense for them,” he added.

However, the offtake for electric hatchbacks and sedans in the personal segment would be slow as the customers would not like to pay a higher upfront price for the only car in the family without the adequate charging infrastructure in place, Jejurikar stated.

“In the SUV space, whether entry or mid-sized, there will be a much faster adoption as they are typically part of households which have more than one car,” he added. When asked if the time was ripe for electric mobility to bloom in the country, Jejurikar said: “It is both yes and no. Currently, the penetration is 1 per cent in the C segment and around 4 per in the B segment. Is this 1 and 4 per cent going to go up to 30 and 40 per cent overnight, no, it is not going to happen.”

He further said: “But we are going to see steps towards 10 per cent 15 per cent and which is why 20-30 per cent penetration in the next 4-5 years is a realistic road map for the segments which we operate in.”

Jejurikar said the company expects to take a final call regarding the manufacturing infrastructure for its electric sports utility vehicles in over the next 3-6 months. The company has already unveiled its first electric SUV under the XUV brand– the mid-sized XUV 400, which would be rolled out from its Nashik plant in Maharashtra.

It is now in talks with 3-4 state governments, considering the incentives being offered, to finalise on the production plan for the remaining products. “We probably will have to decide in the next 3-6 months,” Jejurikar said.

He was replying to a query as to how soon the company could finalise the production strategy. On a query about whether the company would go into for a new facility or utilise its existing plants, which roll out its Internal Combustion Engine (ICE) model range, he noted that it is yet to be finalised. The automaker currently rolls out its conventional ICE vehicles from plants in various states, including Maharashtra and Tamil Nadu.

On investments lined up for the electric segment, Jejurikar noted that the company has already stated that the capital expenditure towards electric programmes over a period of three years would be in the range of Rs 8,000-9,000 crore.

“That is the immediate funding requirement for our electric strategy. It includes most of the investment around everything,” he stated. In July, impact investor British International Investment (BII) announced that it would invest Rs 1,925 crore in Mahindra & Mahindra’s new electric vehicle arm, “EV Co.”

With the chip situation easing and record bookings under the belt for products like Scorpio N and XUV 700, it could well turn out to be the best ever festive season and year for the company in terms of sales. “Hopefully, yes,” Jejurikar said when asked if the current fiscal could turn out to be the best for the company in terms of sales.

On-chip supply situation, he stated: “Many constraints that we were having, we have been able to overcome.” The company dispatched close to 30,000 SUVs to dealers last month; its highest ever wholesales in a month. On the company choosing pure electric products over hybrids, Jejurikar said the move is aligned with the government’s road map.

With inputs from PTI

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