Mahindra & Mahindra’s first major step in the electric vehicle industry was the acquisition of Reva Electric Car Company 12 years ago. Things didn’t progress as planned for several reasons. Now, the SUV maker makes another attempt to join the more mature EV megatrend, by floating a new company dedicated exclusively for electric passenger vehicles. Valued at INR 70,070 crore, the yet-to-be-named company has found an investor in British International Investment, the UK’s development finance institution, which will have a ‘sub-5%’ stake in it.
Rajesh Jejurikar, ED, Auto and Farm Sectors, Mahindra & Mahindra, elaborates the new strategy, its business scope, and whether a similar approach could be taken in the future for the commercial vehicle business too, in this interview with ETAuto’s Consulting Editor Sumantra Bibhuti Barooah
Q: What parts of the existing setup will be tapped by the new ‘EV Co.’ and what will be done afresh?
A: Manufacturing will be in the auto plants in Chakan and Nashik. For product development, we will leverage MRV (Mahindra Research Valley) in Chennai, the Detroit centre, and the EV technology team based in Bengaluru. There are experts in embedded software, and other areas. They will all be service providers for the new EV company.
So we carry over the capability and infrastructure of people, facilities, and all of that. But at the end of the day, we are preparing for a new customer. And that’s really the strategic intent of how we’re going to create an exciting portfolio.
Q: So, what will be the language you will be talking or approach you will be taking for the new customer?
A: More about that on August 15.
Q: How many of the 5 products by F27 will be ‘Born Electric’?
A: Four of them. The XUV 400 (not a ‘born electric’ model) will be revealed in September here in India. And more on what we are going to do in ‘Born Electric’ you will see soon.
Q: The EV industry is very technology-intensive, and investment-intensive. Collaboration is increasingly becoming the name of the game. Are you looking at more collaboration?
A: Collaboration around technology is certainly the name of the game as you have said. Everybody thinks that it’s the way to go. And we will certainly look at doing more of that.
For funding, we are covered for the first couple of years by the British International Investment. It’s not that we needed the money to do this. It’s just that we found a like-minded partner. We said let’s get started. And then we can attract other like-minded partners. We go on in different phases of funding for over a period. There’s no urgency like, let’s say, we need the money tomorrow to move. We’ll bring in funds at the appropriate time through multiple sources but based on the right timing.
Collaboration around technology is certainly the name of the game. Everybody thinks that it’s the way to go. And we will certainly look at doing more of that. Right now, the focus is on getting the new EV company going and scaling up the SUV business. We have a very successful last mile mobility business. We are working on electrifying our pickups. All of that work is on~
Q: Will the new company have electric SUVs only for personal application?
A: Yes, because our SUV strategy is focused on our SUV purpose and all of that. It is to bring alive the SUV purpose, which is about creating adventure-ready, authentic vehicles which help people explore the impossible. That is not commercial. Even in ICE we are not chasing the commercial segment.
Q: There could be more opportunities than just SUVs at some point. Would the new company be flexible for that?
A: By way of scope of the company, yes, because it’s all passenger vehicles. By way of strategy, we don’t intend to. The scope of the company is not SUVs. The scope of the company is passenger electric vehicles. So the scope allows us to do anything as per the passenger vehicle definition of SIAM.
Q: So, at some point you may look at something beyond SUVs?
A: If we have to, but there is no intent to. We are strongly coming from the context of where is our right to win. And where you have a right to win is where we should plan. That’s what we’re doing right now. And you can see that the last three, four products are all in areas that we have a right to win. And that’s why they’re doing so well.
Q: Electrification is also happening on the commercial vehicles, led by buses, and last mile transportation. Do you think at some point, there could be a merit to have a similar strategy for M&M’s commercial vehicle business too?
A: Right now, the focus is on getting the new EV company going and scaling up the SUV business. We have a very successful last mile mobility business. We are working on electrifying our pickups. So, all of that work is on.
The point is, do you need to spin everything out? The answer right now is no, there’s no hurry to think of that.
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