Buoyed by "a real serious thrust" from the government in promoting electric mobility, Mahindra & Mahindra ups its stake in the EV industry with a planned series of moves.
24 May 2017 | 10826 Views | By Sumantra B Barooah
Mahindra Electric, the Mahindra Group's electric vehicle (EV) arm, is fully charged up and raring to capitalise on new business opportunities.
Currently, Mahindra Electric has a capacity to assemble up to 5,000 EV systems annually in its Bengaluru plant. After assembly, they are despatched to the plants where the vehicles ...
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Mahindra Electric, the Mahindra Group's electric vehicle (EV) arm, is fully charged up and raring to capitalise on new business opportunities.
Currently, Mahindra Electric has a capacity to assemble up to 5,000 EV systems annually in its Bengaluru plant. After assembly, they are despatched to the plants where the vehicles that they go into, are produced. By 2019-20, Mahindra Electric plans to have assembly capacity of 60,000 units a year. Towards that, it will build a new plant in Chakan, which may have an annual capacity of 48,000 units as the Bengaluru plant's capacity can be scaled up to 12,000 units with three working shifts in the next two or three months.
Mahindra Electric is looking at expanding its portfolio of vehicles. Currently, it has the e2O hatchback, eVerito sedan and the eSupro van. A three-wheeler (4-seater and 6-seater) will be launched in the next two months. To be initially available with a lead-acid battery pack, the three-wheeler will also have a version with a lithium-ion pack later. A 32-seater electric bus, scheduled for launch in a year and a half from now, is also in the works.
On the personal vehicle segment, Mahindra Electric's most ambitious project will be for a premium car to be developed and designed by Pininfarina, which is owned by the Mahindra Group. "We are getting very close to getting the project approved," says Dr Pawan Goenka, MD, Mahindra & Mahindra and chairman, Mahindra Electric. It will take 3-4 years for its launch after receiving the approval. The Aero concept that was showcased at the 2016 Auto Expo could also be launched in an electric version.
Electric SUVs in the offing
M&M will have "one or maybe two" high-end SUV-type electric vehicles too. "I do not think we can justify having three or four high-end vehicles because the market will not be very large," says Dr Goenka.
Autocar Professional was the first to report about M&M's plan to build electric SUVs, in March 2013.
The high-end vehicles will be mainly targeted at overseas markets. Mahindra Electric had ventured into the United Kingdom, an important EV market in Europe, in 2015 but post Brexit it did not find it feasible to continue the business there. The overseas strategy will be revisited once Mahindra Electric's 380V system will be ready. The company plans to introduce the first products with the 380V system during the second half of 2019. It will be shared with SsangYong.
For the next 2-3 years, the company's focus will be only on growing the Indian market with 48 - 72 volt products. Dr Goenka says that the current subsidy levels are just about right but growing volumes with the current level of cost structure will hurt the company.
Therefore, Mahindra Electric has set a target of reducing manufacturing cost of its EVs (excluding battery pack) by 20-25 percent to make EVs affordable for customers and the business viable for the company. The battery pack currently costs around $270 per kWh. A price level of $170-180/kWh is what would make it more viable for Mahindra Electric. According to a McKinsey report, it is expected to reach 190/kWh by 2020.
"OEMs and suppliers have to invest in EVs with a long-term vision," says Dr Goenka, who is a "lot more" confident than earlier about large-scale electric mobility becoming a reality in India. The government's focus on promoting indigenous EV component industry and charging infrastructure is also fueling his confidence. The government apparently expects a thousand chargers to be installed during the current financial year. The strategy is to have swappable batteries for commercial vehicles, and plug-in charging for passenger vehicles.
In the domestic market, fleet operators are a key ‘constituent’ for the EV industry. Mahindra Electric already has fleet operators Lithium and A2Z as its customers. E-commerce player Big Basket also uses Mahindra EVs. The company is in talks with "several" others.
Need for speed
To sustain its leadership and continue to be a strong player in the EV market which is expected to take off soon, Mahindra Electric is investing in technology. "We are planning to offer dual- drive mode. The new powertrain will offer top speed of up to 200kph," says Mahesh Babu, CEO, Mahindra Electric. In a presentation, Babu shares that 150kW with 400 Nm, 15,000rpm powertrain, 380V to 65V battery systems delivering up to 400km in a single charge, 5X improvement in power density (183 to 1000w/kg) in electronics are some of the things what will find their way into future Mahindra EVs.
Thus far, M&M has invested Rs 600 crore in the EV business which it acquired from Reva Electric Car Company by buying a majority stake in it seven years ago. "I must thank the Mainis (promoters of Reva Electric Car Company) for bringing M&M to the EV space," says Dr Goenka. The business is yet to turn profitable. Dr Goenka will not like to predict the EV industry volumes because he has "been wrong for sixyears" but he is bullish on it now more than ever before because "there's a real serious thrust from the government of India".