Mahindra & Mahindra Ltd., renowned for its robust diesel SUVs, is making a significant leap towards cleaner transportation by investing 120 billion rupees ($1.4 billion) into its electric vehicle (EV) business over the next three years. This substantial investment underscores the automaker’s commitment to advancing electric mobility.
In a recent post-earnings call, Rajesh Jejurikar, CEO of Mahindra’s auto and farm businesses, revealed that the company is in the advanced stages of starting production on its Born Electric portfolio. This portfolio includes six battery-powered sport utility vehicles (SUVs), set to launch between January and March. By 2027, Mahindra anticipates that battery-powered models will comprise 20-30 percent of its SUV lineup.
Mahindra is actively discussing partnerships to manufacture EV batteries in India, a move that could significantly boost the local EV supply chain. This initiative is part of a broader strategy to accelerate Mahindra’s transition to electric vehicles, helping the company catch up with rival Tata Motors Ltd., which currently leads India’s clean car market.
Decarbonizing transportation is essential for India to achieve its net carbon zero goal by 2070. Despite this urgency, electric cars represented just 2.3 percent of the total passenger vehicles sold in India last year. High prices and a lack of charging infrastructure remain significant barriers to consumer adoption of EVs.
The investment in Mahindra’s EV unit has attracted substantial interest from international investors. British International Investment Plc has committed 12 billion rupees, while Temasek has contributed 3 billion rupees. Anish Shah, Mahindra’s CEO, mentioned that the UK agency will hold off on a portion of its additional planned investment of 7.25 billion rupees, as the EV unit currently has sufficient funds. Both firms will reassess the need for further investment in six months, with Temasek planning to inject an additional 9 billion rupees.
Mahindra’s stock exchange filing highlighted that the company and its auto division will generate enough cash to cover the planned EV investment. However, while Mahindra is focusing on cleaner transport, it will continue to maintain an “aggressive” portfolio of internal combustion engine (ICE) vehicles. Over the next three years, Mahindra plans to invest 140 billion rupees in gasoline- and diesel-powered vehicles, exceeding its EV investment.
Jejurikar also noted that Mahindra is exploring hybrid technology as a bridge towards full electrification. However, the company prioritizes the electrification of its models to reduce emissions effectively.
This bold move into the EV market signifies Mahindra’s commitment to sustainable mobility while balancing its traditional strengths in ICE vehicles. With significant investments and strategic partnerships, Mahindra is poised to play a crucial role in the future of electric transportation in India and beyond.
