Mahindra & Mahindra has just announced plans to boost investments in its electric vehicle business, Mahindra Electric Automobile, to Rs 120 billion ($1.44 billion) over the next three years, Bloomberg reports.
Moreover, the Indian legacy automaker plans to sell some assets related to its EV business to Mahindra Electric Automobile for Rs 7.96 billion. According to Managing Director Anish Shah, the move is part of the company’s plans to solidify its EV business and prepare for the listing of its EV unit.
Mahindra asserted in a stock exchange filing on Thursday that the company and its auto unit will yield enough cash to fund the planned investment.
Electrification plans
Mahindra’s Auto and Farm Sector Executive Director and CEO Rajesh Jejurika disclosed in a post-earnings call Thursday that the Indian automaker is now in the “advanced stage” of starting production of the Born Electric portfolio.
For context, this new portfolio consists of six all-electric sport utility vehicles. Mahindra plans to officially launch these electric SUVs from January to March.
The executive also set a target of having BEVs account for 20% to 30% of Mahindra’s SUV portfolio by 2027.
In addition, CEO Jejurika further revealed that the company is now in “active” talks with a potential electric vehicle battery production partner in the country.
Primary purpose
Mahinda’s decision to increase its EV investment will substantially aid Mahindra Electric Automobile to accelerate its portfolio expansion and catch up with rivals like Tata Motors.
Tata has dominated the Indian electric vehicle market until today. However, global players like Tesla are also eyeing potential entry into the local market.
The move will also help decarbonize the domestic transportation industry to achieve carbon neutrality by 2070.
As per BloombergNEF, EVs only accounted for 2.3% of the total passenger vehicle sales in 2023. The weak sales are apparently due to high prices and a lack of charging stations in India.
Investors
According to the report, British International Investment Plc has invested Rs 12 billion in Mahindra Electric Automobile. However, The UK agency has decided to withhold a portion of its investment of another Rs 7.25 billion as Mahindra Electric Automobile currently has enough funds. Singapore-based investment firm Temasek also allocated Rs 3 billion.
Mahindra Electric Automobile will utilize the funds to develop and market a new electric SUV portfolio with advanced technologies.
Despite Mahindra’s intensified efforts in electrification, it remains committed to offering an “aggressive” internal combustion cars lineup. In fact, it allocates Rs 140 billion in this endeavor over the next three years, notably higher than its EV investment.
