Suman Mishra, MD and CEO of Mahindra Last Mile Mobility, explains why electrification makes sense in the SCV market and why the time to invest is now.
11 Mar 2025 | 3541 Views | By Ketan Thakkar, Shahkar Abidi & Prerna Lidhoo
Suman Mishra, the managing director and CEO of Mahindra Last Mile Mobility Ltd, found herself navigating the precarious world of fundraising in late 2022, a course of action that would turn out to be a test of her resilience and resolve. Tasked with securing the company’s first round of external ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Suman Mishra, the managing director and CEO of Mahindra Last Mile Mobility Ltd, found herself navigating the precarious world of fundraising in late 2022, a course of action that would turn out to be a test of her resilience and resolve. Tasked with securing the company’s first round of external capital, Mishra stepped into uncharted territory, facing the skepticism that often shadows ambitious players in India’s fledgling electric mobility sector.
The company’s operations at the time were modest, its potential intriguing, but largely unproven. “No one will invest,” she remembers being told—a refrain tinged with doubt and dismissal. However, Mishra was no stranger to high-stakes decisionmaking. Prior to this role, she had led transformative initiatives across various divisions of the Mahindra Group, focusing on capital allocation, business restructuring, and strategic planning.
Before joining Mahindra in 2015, she held key positions at McKinsey, where she served as an Associate Partner, and at Cipla, where she oversaw global product launches. This extensive experience offered her a unique vantage point, one sharpened by years of evaluating companies with a clinical eye. “Why should I invest?” was a question she had asked countless times. Now, on the other side of the table, pitching her own vision, she found the process humbling.
The company “felt like my own baby,” she admitted to Autocar Professional, capturing the emotional intensity of the experience. Balancing the demands of fundraising with the operational challenges of running a company proved to be a delicate act. With no fully developed second-line leadership team, Mishra relied on a lean support group, including a strategy associate and an executive assistant. The company’s affiliation with the Mahindra Group, however, proved to be a critical asset. For investors wary of the opacity often associated with startups, Mahindra’s reputation for sound governance and ethics served as a reassuring counterweight.
In March 2023, Mishra’s efforts bore fruit. Mahindra Last Mile Mobility secured Rs 600 crore in funding from the International Finance Corporation (IFC) at a valuation of Rs 6,020 crore. For Mishra, the success went beyond financial metrics; it validated her vision of a company focused on product development, capacity expansion, and backward integration.
The journey to this milestone had been arduous, requiring months of crafting a strategic roadmap and educating potential investors on the intricacies of India’s electric mobility landscape. The narrative was further strengthened in January 2024 when the India-Japan Fund (IJF), known for its rigorous investment approach, committed Rs 400 crore, raising the company’s valuation to Rs 6,600 crore.
The move reflected not only IJF’s confidence in India’s last-mile mobility sector but also Mahindra’s positioning within it. "When you can see that mix of an entrepreneurial company inside a large conglomerate, I think that is very attractive for an investor, especially if a business has tailwinds," Mishra explained, sitting in her Mumbai office.
From Freedom to Focus
In the evolving arena of electric mobility, where aspirations often brush up against the hard edges of technological and logistical realities, there occasionally arises a moment when ambition and possibility align. This is precisely the opening that Mahindra & Mahindra was aiming for, when it launched Mahindra Last Mile Mobility (MLMM). At the heart of this venture was an unusually liberating directive from Anish Shah, the company’s group CEO and MD, and Rajesh Jejurikar, Executive Director and CEO of the Auto and Farm Sectors: “You decide what you want to do.” For Suman Mishra and her team, this brief was both a challenge and an opportunity—a chance to reimagine India’s small commercial electric vehicle (SCEV) market from the ground up.
The company’s first year was marked by the predictable challenges of establishing a new business: building operational capacity, optimising supply chains, and refining strategy. Mishra and team undertook an intensive effort to understand the needs of the market, conducting 30 customer interviews in a single month. These insights, gathered at the grassroots level, became the foundation for Mahindra LMM’s approach.
By the end of 2023, the effort was beginning to bear fruit, with monthly sales reaching 5,000 units—a milestone that boosted confidence within the organisation. It was a pivotal moment for the company. This newfound momentum paved the way for a phase of calculated expansion and strategic collaborations, including partnerships with the International Finance Corporation (IFC) and the National Investment and Infrastructure Fund (NIIF).
The numbers offer a glimpse into the rapid evolution of Mahindra LMM’s trajectory. From selling 66,000 electric vehicles in FY24 to surpassing 45,000 units by October of FY25, the company has achieved remarkable growth. The fiscal year also saw the launch of several new models, starting with the Treo range in April, followed by the Zeo and the E Alfa Cargo Plus.
Meanwhile, an expanding distribution network has bolstered Mahindra’s presence in key markets. By November, monthly sales exceeded 8,000–9,000 units, and the company crossed a historic milestone: selling 200,000 electric vehicles. Half of this volume was achieved in just the last 17–18 months. Looking forward, Mishra envisions the next 200,000 units being sold within the next 2–2.5 years, contingent upon the sustained momentum of electrification in India.
“It will also depend on sustaining the trajectory of electrification,” she noted, striking a tone of measured optimism. In terms of revenue, Mahindra LMM expects to close the revenue at Rs 3,500–4,000 crore in this fiscal or may be next year. While ambitious growth targets of reaching a billion dollars in two years are being discussed, there is an emphasis on sustainable and steady progress.
The focus remains on delivering consistent results rather than overpromising. But success in this industry, as Mishra is quick to point out, is rarely as straightforward as production numbers suggest. The EV cargo market, in particular, presents its own intricate challenges. Here, payload, range, and cost intersect in ways that upend the traditional logic of internal combustion engine (ICE) vehicles.
“In an ICE world, bigger was better. You made the two-tonne, then the three-tonne. But in EVs, it’s about balancing battery size and price against customer willingness to pay. You have to solve a differential equation,” she explained. Take the needs of e-commerce giants like Amazon or BigBasket.
For such players, Mahindra offers a mix of three-wheeler (Zor) and four-wheeler (Zeo) options, carefully calibrated to handle varying load capacities and distance requirements. On the other hand, small businesses, garbage collection services, or furniture distributors often gravitate towards products tailored to their specific needs, whether that’s volumetric efficiency or the ability to manage heavier payloads. This segmentation reflects a departure from the one-size-fits-all mentality that has long defined the ICE market.
“If I overspec a product and you have to use it for less, it’s not economical anymore for you,” Mishra observed. The transition to EVs, then, demands both precision and adaptability—a willingness to design for the idiosyncrasies of urban logistics rather than relying on the brute force and range of ICE trucks.
Mahindra’s strategy unfolds against the backdrop of intensifying competition. Established players such as Tata Motors, Bajaj, and Piaggio, alongside a host of nimble startups, are devising their own EV strategies. From small payload urban vehicles to larger intercity models, each competitor is vying for a share of the market which is rapidly expanding.
Dominating the Market
The electric vehicle (EV) revolution in India is unfolding unevenly across categories, with three-wheelers standing out as an unexpected leader. In FY25, the penetration of EVs in the three-wheeler segment reached an impressive 22%—the highest in the country. It’s a stark contrast to other categories like two-wheelers and four-wheelers, where adoption has been relatively slower.
This surge in electrification, up from 14% and then 17% in preceding two years, reflects a confluence of factors: the entry of major OEMs (original equipment manufacturers), a growing array of EV offerings, and the inherent economic advantages for customers in the commercial vehicle sector.
For Mahindra Last Mile Mobility (MLMM), the rising tide of EV adoption has been accompanied by significant achievements. By FY24, MLMM had claimed an impressive market share: 40% according to Vahan data (which includes startups) and 52–53% based on SIAM (Society of Indian Automobile Manufacturers) metrics, which exclude newer entrants.
Much of this dominance stems from Mahindra’s strategic expansion and its alignment with the shifting priorities of customers in the logistics and commercial transportation sectors. But success in the EV market isn’t just about capitalising on the current demand; it’s about preparing for the future. To that end, Mahindra has been scaling its production capabilities.
In Telangana, for example, it signed an MoU with the state government to invest Rs 1,000 crore in new capacity—a project slated to be operational by mid-next year. "That is very much underway," noted Mishra. Alongside facilities in Haridwar and Bengaluru, the Zaheerabad plant in Telangana will play a key role in meeting growing demand.
Currently, the plant's lithiumion based vehicle production runs at 10,000 Li-ion vehicles per year, with additional capacity available through flexible shifts and automation. This robust planning is essential, given the ambitious growth targets set by the company. By 2027, MLMM aims to grow its EV business fivefold from its base of 66,000 units in FY24.
This aspiration aligns with the broader trajectory of India’s EV market. Analysts anticipate that EV penetration in the three-wheeler segment could rise to 50% within the next two to three years, translating to approximately 300,000 units annually. MLMM is positioning itself to capture 40% of that market, a goal that will require meticulous capacity planning and supply chain investments.
Leveraging the PLI Scheme
While MLMM continues on its growth journey, it is looking to leverage the benefits of the government's Production-Linked Incentive (PLI) scheme, which has emerged as a critical catalyst for adoption. Designed to spur investment and innovation, the PLI scheme offers financial incentives to manufacturers based on investment thresholds and vehicle sales performance.
Mahindra Group, as a whole has already crossed the Rs 2,000 crore cumulative investment benchmark required for eligibility. The scheme operates on annual slabs. Last year, it was Rs 800 crore. Then, depending on the qualified vehicles sold, you receive incentives of 10%, 12%, or even 13% of sales, based on the applicable numbers.
For its full range of products, Mahindra obtained the necessary certificates, but it takes about three months to secure those approvals. During that time, whatever the company sells, is ineligible for PLI benefits. This certification lag creates a dilemma for manufacturers. Should they withhold new product launches or seed the market with a limited number of vehicles despite forfeiting potential benefits? Mahindra has taken a pragmatic approach. “It depends on your business prerogative at that point,” the executive noted, adding, “We have also launched without PLI and said, ‘Fine’."
This measured strategy has positioned Mahindra well to maximise its returns under the scheme. The company anticipates achieving a 13% incentive once it surpasses Rs 6,000 crore in sales, a target that reflects the escalating rewards of scale embedded in the program. While Mishra remained tight-lipped about the precise amount Mahindra expects to claim under PLI benefits—citing internal governance restrictions—she hinted at a substantial figure.
“It would be in three-digit numbers,” she revealed, underscoring the financial significance of the incentives. The company anticipates receiving its PLI disbursement in the fourth quarter of FY25, a timeline aligned with its broader strategy to expand EV offerings and market penetration.
Path Ahead
This brings the conversation to an inevitable question: when will the EV market reach an inflection point? For three-wheelers, the answer may already be here. From a TCO (Total Cost of Ownership) perspective, EVs in this category are significantly more cost-effective than their ICE (internal combustion engine) counterparts.
Over a five-year period, a three-wheeler EV can save customers Rs 2–3 lakh—often equal to the vehicle’s entire upfront cost. Despite this economic advantage, the adoption in metro cities has lagged. Issues like parking constraints, permit restrictions, and slower municipal policy implementation have kept electrification rates in urban centres at just 5%.
In contrast, smaller cities and regions like Uttar Pradesh and parts of the Northeast have surged ahead, with many areas already reaching critical mass in EV adoption. These markets, less reliant on ICE vehicles historically, have embraced the economic and environmental benefits of electrification. Meanwhile, metro cities, despite their larger base, have been slow to transition.
"We have to grow these metro cities. Otherwise, the electrification percentage will plateau," Mishra warns. For Mahindra and the broader EV industry, government policy continuity is key. The transition away from subsidies must be balanced with support in areas like financing and infrastructure development. “The government has been consistent in its vision for electrification,” notes Mishra. “What we need now is continuity and clarity.” Another critical bottleneck is financing.
While non-banking financial companies (NBFCs) dominate EV lending, offering interest rates as high as 22–24% depending on credit profiles, these rates disproportionately burden lower-income customers—the primary buyers of three-wheeler EVs. Public sector banks, with access to lower-cost capital, have been slower to step into the space, limiting affordable financing options. Startups and green finance initiatives have emerged as disruptors, but their scale remains small, relative to the needs of the market.
Global Plans
To compete effectively in the three-wheeler space, it is essential to adopt a global perspective. To be sure, currently, Mahindra LMM's focus so far has been on the domestic market rather than international expansion. However, plans are in place to begin scaling operations in one or two international markets in the upcoming financial year.
While this is only the start of a long journey, leveraging the existing Mahindra tractor and auto export networks are expected to play an important role in accelerating growth. Initial international markets with high potential include India’s SAARC neighbors, such as Nepal, where sales have already begun, and Sri Lanka, which was recently added to the portfolio.
While these markets present opportunities, challenges like affordability and financing, particularly in countries like Bangladesh, complicate the entry. Creating awareness and working onground will be critical, as export markets often face similar customer behaviors to India but lack subsidies or incentives. "There is no low hanging fruit in exports," explains Mishra.