Mahindra & Mahindra (M&M) Ltd is in the process of identifying a new location to establish a full-fledged manufacturing unit for electric SUVs as the leading auto manufacturer has set an ambitious target of selling a little less than a third of its SUVs in electric format – about 2 lakh units — by 2027.
As the company released its electric SUV vision with the unveiling of a new EV platform, showcasing five electric SUVs (in the above 4-mtr length category) under two EV brands and forging a partnership with Europe’s top automaker Volkswagen for the supply of MEB (Modular electric drive matrix) electric parts for its new EV platform, Mahindra is now seeking to put up a new factory for producing electric SUVs.
“One of the criteria to make that decision is the kind of subsidies we may get from States. We are waiting to go through that process and will keep two or three options open before firming up our manufacturing plans,” Rajesh Jejurikar, Executive Director, Auto & Farm Sectors, Mahindra & Mahindra, told BusinessLine during an interaction.
The company is open to multiple options. The subsidy will not be the only criteria. But it is an important part in deciding the location,” he said adding, “of course, the facility will have to be located in an automotive hub region only. We have now enough States with an automotive ecosystem and they are all keen on attracting EV investments. We have also started talking to few States for the proposed EV manufacturing unit,” said Jejurikar.
Mahindra has set out an ambitious target of selling 20-30 per cent of its SUVs in electric versions by 2027, which will translate into an annual volume of about 2 lakh units. As the first step in this direction, the company will unveil its electric SUV XUV400 next month and the deliveries for the same are expected to start during the first quarter of 2023.
M&M will have a separate EV arm for the development, manufacturing and selling of electric SUVs and the electric arm has already attracted investments to the tune of ₹1,925 crore from British International Investment, UK’s development Financial Institution, at a valuation of ₹70,070 crore.
M&M will also invest an equal amount in the EV arm. The total capital infusion for the EV arm is estimated at ₹8,000 crore between FY24 and FY27 for the development of products, supply chain and manufacturing.
Industry experts say the recent policy initiatives by the Indian government are preparing the country to leverage its market size to become a global EV investment destination.
Currently, southern States such as Tamil Nadu, Karnataka and Telangana, and western states like Maharashtra and Gujarat in the West, are at the forefront of the EV manufacturing race. States like Tamil Nadu have two auto and electronic industrial clusters complementing and supporting each other. With a host of incentives, Tamil Nadu has attracted more than ₹20,000 crore investments in the EV sector.