Mahindra and Mahindra gears up for EV play, niche e-farm products

Mahindra and Mahindra (M&M) play their cards in the all-electric vehicle game – with passenger cars (PVs) and e-three-wheelers as well as specialized e-farm products.

Analysts have already expected 23 percent growth in the size of the auto segment between fiscal 22 and 25 under the differentiated EV and SUV plan. M&M is already a market leader with a 36 percent share of electric three-wheelers and has a ready-made factory in Zahirabad to meet the demand. In the farm segment, it will focus on specialized electrical products.

The main play will be electric SUVs.

It has already begun to expand its PV capacity (39,000 per month now) to 49,000 per month by FY24; Besides setting up a Rs 10,000 crore EV facility in Pune which will roll out the new SUV on INGLO platform – XUVe8. This will be followed by four more electric cars on the INGLO platform through October 2026 and beyond.

M&M’s experiment with EVs began with the electric three-wheeler Bijlee back in 1999 – a 10-seater three-wheeled electric rickshaw launched for ₹ 3.3 lakh in Delhi in 2002. In 2013 it launched e2O on the Reva platform which got It was approved in 2010. M&M discontinued the product in 2019 amid poor sales and tightening regulations.

Now with its updated electric vehicle plan, the company is eyeing 20-30 percent of its total sales by 2027 – roughly 200,000 units per year.

Are they not late entrants in a category where peers Tata Motors (TML) have a head start?

Rajesh Jegorkar, CEO and CEO of the Automotive and Farm Divisions, M&M, disagrees: “The penetration of electric vehicles in Class C SUVs is less than a percentage, and in Class B SUVs it is between 1.5 and 2 percent. So no “You can be a late entrant in a segment with low penetration. We believe that by the time our flagship products come out, the market will be at a tipping point. We are never late to the party.”

However, analysts feel that a 20-30 percent share of total PV sales coming from electric vehicles is a very ambitious target indeed. For example, TML sold 38,322 EVs in retail in fiscal 23 out of a total of 484,843 PVs that year, with FADA data shown, or about 7.9 percent of its PV sales.

“As you see the electric vehicle adoption cycle, we feel the SUV customer will adapt to the EV faster. Many of our SUV customers are multi-car homes, so are our M&M customers. So while we think EVs will be 20 to 30 percent From our overall portfolio, we don’t think the market would have moved so quickly,” says Jegurekar.

M&M has consciously chosen to focus on only e-SUVs, thus missing out on small, entry-level electric cars. Last week, MG Motors launched the country’s cheapest Comet EV at Rs 7.98 lakh, lower than its nearest competitor – the Tiago-EV at Rs 8.69 lakh (ex-showroom).

While M&M’s counterpart TML has smaller EVs, M&M decided to move away from it.

Nikunj Sanghi, a vintage dealer with M&M, said the decision to buy a four-wheel electric vehicle is rarely influenced by total cost of ownership (TCO), unlike buying an e-two-wheeler. “The EV is more than a statement,” said Sanghe.

Another M&M dealer said the company has already launched the XUV 400 EV as a “filler” product to celebrate its existence. “The real game-changer will be the BE range of electric vehicles that will come next,” he said.

XUV 400, already has more than 15,000 reservations as of February, and the company has started deliveries. Industry sources say that M&M is not looking to sell more than 1,000 units per month of this vehicle.

Jejurikar said that with 50 percent of the PV market as SUVs now, SUVs are already a key game for every automaker. He added that since they have a premium product offering, this is why they are able to get volumes. He said, “We don’t try to define our brand purpose through scale, we define it through a certain design philosophy, which is unmissable presence and the ability to venture.”

The UV space is heating up like this — M&M had a 17.8 percent share of the UV market as of FY23. In the April-January period, Maruti Suzuki (MSIL) had 18.5 percent, while TML had 16.59 percent.

The fight for electric UV share will soon be over. One analyst felt, “Partnerships will play a key role – M&M has an advantage here by associating with Volkswagen to supply MEB (Modular Electric Drive Array) electronic components for the INGLO platform. But, it will have to work on a localization plan soon.”