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Mahindra reaffirms faith in e-mobility despite policy detour

Murali Gopalan | Updated on: Mar 22, 2018
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Company bullish on growth prospects in EVs, which will extend to the global arena

There are no two ways about the fact that Mahindra & Mahindra has been at the forefront of electric mobility even if its overall sales numbers don’t quite reflect this intent.

Since the time it acquired the Bengaluru-based operations of Reva in 2010 to kick off the journey, M&M has pulled out all stops to grow its electric vehicle (EV) business. During this time, the e2O Plus hatchback has become its best known mascot even while other models such as the Verito sedan as well as some of its small cargo carriers now have electric options.

If the big break in numbers has still been elusive, it is largely to do with the absence of fiscal sops across the country and, more importantly, charging infrastructure. In a country where affordability is still an issue, never mind all the brouhaha about the affluent middle-class, electric vehicles like the e2O Plus would hardly qualify as an entry-level option for the first-time car buyer.

Things seemed to be looking up when the Centre made known its intent to go all out with its e-mobility drive and announced its intent to have a 100 per cent electric ecosystem in place by 2030. It was clear that this was going to be a tall order even while some manufacturers hurriedly made known their plans to abide by this directive.

This was where Mahindra Electric would have rightly assumed that it had a headstart over the rest thanks to years of hard work in this direction. And even while the Centre subsequently shelved its EV policy, the company had already made up its mind to set up another unit in Chakan near Pune.

Eyeing global market

It was barely 10 days ago when Mahesh Babu, CEO, Mahindra Electric, made an elaborate presentation at Mahindra Research Valley (MRV) in Chennai along with his counterparts in other businesses. It was here that he spoke of the vision to ramp-up production at Chakan and Bengaluru from 12,000 to 70,000 units in the next three years.

“This is conditional on the demand for the different types of vehicles,” elaborates Babu in an email response to BusinessLine . While kits for three-wheelers and light vehicles are planned in Bengaluru, Chakan will be home to heavy-vehicle kits.

“The 70,000-unit capacity between the two facilities is forecasted to be split evenly, based on current volume projections,” he adds. From the company’s point of view, the strategy going forward will be twofold: EV drive train technology and EV products. “At Mahindra Electric, we will be producing the drive train kits that will power the vehicles made by M&M and SsangYong,” says Babu. “We are already following a similar model with the Supro and Verito platforms being electrified by LV (light vehicle) kits.”

The new products slated to be electrified were announced under the company’s EV 2.0 strategy and include two high performance vehicles — an SUV and a sedan — in addition to the eKUV. “The eCosmo bus was showcased at the Auto Expo earlier this year and other variants will be launched shortly,” says Babu.

The company is already producing the complete vehicle for the e2O Plus. In addition, the Treo electric three-wheeler will be produced in Bengaluru. Clearly, there is a well defined roadmap for the e-mobility business, which will balance business priorities between the two plants.

Incidentally, the EV Innovation centre was inaugurated in 2017 and is based in Bengaluru. “With the utilisation and volume of projects we are currently undertaking, we foresee a need for a more elaborate state-of-the-art R&D and test facilities, which will also be based in Bengaluru,” reveals Babu. This new facility will be part of the ₹900 crore investment in EV technology.

Beyond India, Mahindra Electric’s offerings are also present in Nepal and Sri Lanka. In 2014, this writer was invited by the company to be part of the e2O launch in Bhutan, the neighbouring hill kingdom, which is keen on pushing for clean air mobility alternatives.

In addition, Mahindra Electric will be supplying the EV powertrain SsangYong, which it acquired in 2011. This may end up being the big breakthrough in global markets where the Korean auto brand is well established. Likewise, there is every possibility of another exciting chapter happening in EVs with Ford where the partners are still discussing the contours of their alliance.

Nagpur fiasco

Yet, not everything is hunky-dory going by recent media reports on the Nagpur e-mobility drive with Ola, which has apparently ended up being a damp squib with drivers disgruntled with the state of affairs.

When asked if the company has been discouraged by the Ola experiment in Nagpur, Babu responds that from a product perspective, the company’s cars have run more than two million kilometres with “positive feedback from the drivers and customers who have used the vehicles”.

It is also his view that the EV ecosystem needs some “initial learnings and adoption that we believe was faster and quicker in case of Nagpur”. His response indicates that the experiment is not quite as disastrous as the reports have made it out to be.

“We are confident that the electric vehicle ecosystem will evolve soon with the initiatives already taken by all stakeholders and the learnings from the pilots,” reiterates Babu.

The other reality to be factored in is the Centre’s decision to keep its EV policy on hold after all the initial bluster. Is there really a reason then for Mahindra Electric (and other auto-makers) to go flat out, especially when infrastructure constraints, in the form of charging stations, still remain?

A bold vision

“We invested in EVs back in 2010 because we believe in the need for sustainable mobility,” replies Babu. As he reminds you, the Centre had expressed a “bold vision” to go all electric by 2030 and the EV policy was part of that initiative.

“We believe that the NITI Aayog report on Transformative Mobility Solutions for All sets a clear direction on what India needs to do in the mobility space,” continues Babu. Based on the report, action plans have already been made by various ministries to support e-mobility.

This, of course, includes the release of the world’s largest EV tender for 10,000 vehicles by EESL (where Tata Motors also participated in the exercise along with Mahindra Electric) and the Power Ministry’s intervention to declare charging services exempt from the restriction on resale of electricity.

It, of course, remains to be seen if this EESL order will now be history with the scrapping of the EV policy.

Babu, clearly, does not share this pessimistic outlook. He points out that the company has already completed the delivery of 150 vehicles as part of the Phase I requirements and has now bid for Phase II. Further, a new tender for an additional 10,000 vehicles was announced earlier this month.

”With these developments, it is clear that the intention and action to adopt EVs in government departments is running strong,” he says. “There are indications that the FAME scheme will be extended again past March 31, which was expected and is towards a positive direction.”

Published on March 22, 2018

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