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Mahindra to expand electric vehicle line-up, invest Rs 8,000 cr for electric future

Mahindra & Mahindra is ramping up its production schedule to create new vehicles and investments as it remains “very optimistic” about the country’s steady transition towards electric vehicles adoption in the coming few years. A senior corporate executive claims that the Mumbai-based automaker expects a gradual transition to electric mobility with the fleet and sports utility vehicle segments to lead the change in the domestic market.

“Our internal research tells us that 25 percent of existing SUV buyers would like to consider an electric SUV as their next purchase. The research also tells us that in the next 2-3 years, we will see such a transition Rajesh Jejurikar, executive director (auto and farm sector), Mahindra & Mahindra told PTI in an interaction.

He added that the company expects around 20-30 per cent of its SUVs to go electric five years after the percentage of its SUVs going electric. Taking a big bet on green mobility, Mahindra has rolled out five new electric sports utility vehicles (SUVs), of which the first four are expected to hit the market between December 2024 and 2026.

Read also: ‘And you thought…’ Anand Mahindra reacts to EV owner fined without pollution certificate

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

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

However, the uptick for electric hatchbacks and sedans in the personal segment will be slow as customers will not want to pay a higher upfront price for the only car in the family without adequate charging infrastructure, Jejurikar said.

“The SUV space, whether entry or mid-size, will see rapid adoption as they are typically part of households that have more than one car,” he said. Asked whether the time has come for electric mobility to flourish in the country, Jejurikar said: “It is both a yes and a no. Currently, penetration is around 1 per cent in the C segment and around 4 per cent in the B segment. Is this 1 and 4 percent going to go up to 30 and 40 percent overnight, no, it’s not going to happen.”

He added: “But we are going to see a move towards 10 per cent 15 per cent and that is why 20-30 per cent penetration in the next 4-5 years is a realistic road map for the sectors we operate in. ”

Jejurikar said the company expects to take a final decision regarding the infrastructure to manufacture its electric sports utility vehicles in the next 3-6 months. The company has already unveiled its first electric SUV under the XUV brand – the mid-sized XUV400, which will be launched from its Nashik plant in Maharashtra.

It is now in talks with 3-4 State Governments to consider the incentives being given to finalize the production plan for the rest of the products. “We will probably have to make a decision in the next 3-6 months,” Jejurikar said.

He was responding to a question on how soon the company can finalize the production strategy. When asked whether the company will move to a new facility or use its existing plants, which roll out its internal combustion engine (ICE) model range, he said that 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 for the electric segment, Jejurikar said the company has already stated that the capital expenditure for electric programs over a period of three years would be Rs 8,000-9,000 crore.

“This is an urgent need for funding for our electric strategy. It involves most of the investment around everything,” he said. 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, the “EV Company”.

With the chip position easing and record bookings for products like the Scorpio N and XUV700, this could prove to be the best festive season and year for the company so far in terms of sales. Asked whether the current financial year could prove to be the best for the company in terms of sales, Jejurikar said, “Hopefully, yes.”

On-chip supply situation, he said: “Many obstacles that we had, we have been able to overcome them.” The company shipped around 30,000 SUVs to dealers last month; This is the highest ever wholesale sale in a month. On the company choosing pure electric products over hybrid, Jejurikar said the move is in line with the government’s road map.

With inputs from PTI

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