Mahindra looks to diversify electric vehicle portfolio

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Mumbai: Mahindra and Mahindra Ltd will have electric variant of all its existing and planned crossover sport utility vehicles (SUVs), managing director Pawan Goenka said on Tuesday.

Mahindra’s current line-up of crossovers includes the XUV5OO and the KUV1OO. Another compact SUV—code-named S201—will be added next year.

“All our crossover SUVs will have electric versions,” Goenka told reporters on the sidelines of the launch of a refreshed version of the KUV1OO. Mahindra will launch the electric variant of the KUV1OO in 2018, said Goenka.

As the only commercial electric vehicle (EV) maker in India, Mahindra is looking to capitalize on its first mover advantage by diversifying its EV portfolio, which presently comprises two hatchbacks, the e2o and e2o Plus, a sedan, the eVERITO, the eSupro van and a three-wheeler, the e-Alfa Mini.

The company wants to be present in India’s overall EV space and even take on orders such as the government’s tender for 10,000 EVs, on which the company “will not make money”, Goenka said last week.

Mahindra will participate in the government tender for 9m electric buses as well, said Goenka. About Rs500 crore has already been invested in the company’s EV arm over the past five years, with Rs600 crore more lined up over the next two to three years, he added. “This investment will be used to expand capacity to 5,000 units from the present 500, localize 85% of component production and invest in technology.”

Over the next three to five years, Mahindra will ramp up production of its e-Alfa Mini and also focus on mass urban mobility solutions with the launch of a 32-seater bus.

Meanwhile, Mahindra has been working towards increasing the mix of petrol models in its overall portfolio and reducing dependence on diesel vehicles owing to a sharp shift in consumer preference for the former.

This trend held even for the KUV1OO, which was launched in January 2016. More than half the 60,000 units sold so far were of the petrol variant, said Goenka. “Our petrol offerings may even be stronger than our diesel portfolio by the time the BS-VI emission norms come in 2020,” he said, adding that the company has to prepare for the move towards electric and petrol vehicles. “These are one of the most challenging times I have seen in the industry.”

Analysts said introducing electric and petrol versions of utility vehicles will give the company an advantage over rivals.

The cost of compliance with the BS-VI norms would have been higher by three to four times for Mahindra with a diesel-heavy portfolio, said Puneet Gupta, associate director at I.H.S Markit, a sales forecast and market research firm. “Mahindra’s proactive approach to shift to electric UV will help them,” he said.

EVs attract a much lower 12% goods and services tax (GST) as compared to 28% for petrol and diesel vehicles. In addition to the 1.2 litre petrol engine that powers the KUV and its refreshed version launched on Tuesday, the company plans to develop 1.5- and 2-litre petrol engines as well.

“With these three engines for the commercial line, our gasoline (petrol) strategy will be complete by 2020,” said Rajan Wadhera, president, automotive sector, Mahindra.

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