Financing of EVs still faces challenges: Mahindra Electric

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There are challenges when it comes to the financing of electric vehicles and we have asked the government to add that in priority lending, says Mahesh Babu, MD and CEO, Mahindra Electric.

“We are also engaging with various banks and others for them to look at technology lending and EV adoption lending in a better way. And we can help them out with our telematics data and our 250 million km of electric mobility in India,” Babu told BusinessLine.

Mahindra Electric Mobility Ltd, the electric mobility business arm of the Mahindra Group, is investing ₹1,000-1,200 crore in the next three years, which will include investments in its Chakan plant, the company’s product development, as well as an investment of ₹500 crore for its upcoming R&D centre in Bengaluru.


Mahindra’s focus is on shared mobility and last-mile connectivity for EVs – you have identified these as the areas where the real benefit of EVs will come to India. But when it comes to ICE vehicles, the shared mobility and last-mile connectivity segment only constitutes a small segment. Why is it that you see a big potential in this space for EVs?

The focus went on to the first-mile and last-mile connectivity – particularly on three-wheelers and let’s say Atom (the new electric quadricycle to be launched) and all these products – mainly because of economic factors. If you look at most of the testimonials of the three-wheeler Treo’s owners, most of them talk about the low operating costs and hence, the earning potential. Plus, three-wheelers are also typically, till now, a male dominated one.

With the drive by wire and electric three-wheelers, a lot of women employees are getting into the auto domain (in the) last-mile and first-mile domain. We did a pilot and if you look at the economics, it’s very clearly an additional earning of ₹4,000-6,000 per month due to low operating cost of EVs. India, by and large, had a three-wheeler story – three-wheelers is synonymous with India – and Mahindra has never been in three-wheelers. So, as Mahindra Electric, we found an economic sweet spot (in three-wheelers).

Are there plans to enter the personal segment in the near to medium term in the four-wheeler and two-wheeler segment?

Our primary focus will still remain on first mile, last mile connectivity on passenger and goods. We believe the personal segment actually will pick up much faster between 2020 and 2023. So, we are looking at launching XUV 300 (electric) by the end of the next financial year (which will cater to the personal segment). Mahindra eKUV100, set to be launched in the first quarter of the next calendar year, will also attract some personal segment buyers.

Players like Tata Motors, MG Motor and Hyundai, as well as two-wheeler makers like TVS and Bajaj Auto, have already rolled out products in the personal segment. Is this a matter of concern?

I don’t think we need to be the first to launch everywhere. We have launched India’s first lithium-ion car e2o way back – 10 years back. Now, if you look at what we are – our strategy is, we are looking more at Atmanirbhar Bharat (self-reliant). If you look at Treo, everything except the cell is locally made in India. Similarly, with XUV 300, you will have everything made in India except the cell in a year’s time. So we are looking at building our story along with ‘make in India’ and the Atmanirbhar Bharat concepts. Nothing will be lost in one year, the EV journey is just starting – it’s not going to be a short-lived story, it is going to be a long-lived story. So we will have to come with a very strong local content in it. That’s the reason we are okay (with others already having EVs in the personal segment).

The company had said that there are partnerships that it’s looking at with e-commerce companies like Flipkart, Amazon and Reliance Retail for the newly launched Treo Zor. How’s this panning out?

After we launched the Treo Zor, all the three members we talked about have ordered the Zor and they are eagerly looking at deploying them in large numbers. So we are talking to e-commerce players, because the first and last mile delivery area is picking up with pandemic. We have already confirmed 400 plus orders from e-commerce players and we will be serving them in the coming months.

How do you see the demand scenario currently? Are there signs of recovery?

Amid the pandemic, I think the three-wheeler industry is the most affected. Fortunately, the electric three-wheeler industry is not so much affected…Our first quarter got almost washed off because of the shutdown …But for the other quarters, we are at least above 80 per cent of last year’s volume. So it is (demand) coming back. Also, in certain markets, we have achieved a double-digit market share, like in Kerala, where we are at about a 14 per cent market share…The e-Verito is there in the market – it is meeting all the requirements – but today, the fleet operations are affected because of the pandemic.

The company sold 14,500 EVs FY20. How are this year’s numbers looking up?

This year, we are trying our best to see how we can reach the same number as last year, but I doubt it will be slightly lower than that. But the good news is, unlike other three-wheeler players (ICE), which is down by 70 per cent, we will not be down to that extent. We will almost be equal or slightly lower than last year. That’s what is our expectation but we’ll have to see – the last quarter last quarter only decides everything.

Mahindra Electric has also taken a conscious call to focus on the EV component business and supply to players in the domestic market and the global market. How is that working out for the company?

Our first kit supply to Ssangyong (M&M’s South Korean subsidiary) is starting in another couple of months. And we are in touch with multiple players, but the pandemic has slightly affected it. But fundamentally, there is an interest shown across the globe.

What proportion of sales do you expect from the EV component business in the near to medium term since the focus is also equally on the powertrain development, along with selling EVs?

It depends on how both the markets will pick-up. But including supplying kits to M&M and other global companies, I expect the technology business would be 30-50% (of the total sales) on any given year.

What is your overview of the recently introduced PLI scheme to promote lithium-ion cell manufacturing? What are some of the measures that the government can take to support EVs?

I think the PLI scheme is very good. The details are yet to come, but the draft which NITI Aayog circulated sometime back is a very good scheme to invite cell manufacturers’ interest to come to India…. On the general schemes, I would say that the government of India has given many schemes like FAME-2, fiscal, non fiscal, green number plate, removal of permits… I don’t think any new EV policies are needed. Existing Central government policies and all State governments’ (policies) – whichever they have announced till now – if they implement quickly at the ground level, I think the EV adoption will be much better.

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