Homegrown SUV major Mahindra & Mahindra has entered into an exploratory talk with Europe’s largest car maker Volkswagen Group to lead the electrification space in India and take it to global markets.
This would accelerate the company’s ambition to reach to sell two lakh electric vehicles by 2027 that could potentially generate revenue of around Rs 50,000 crore for EV its subsidiary, while VW may gain localization of parts to take advantage of Indian cost. M&M will have access to the latest VW technologies and should also help reduce the development time and cost to launch its own Born Electric vehicles.
The VW Group could potentially supply parts for 1 million vehicles till the end of the decade, said a senior board member from the German Automotive Group.
On the sidelines, Mahindra & Mahindra also signed a term sheet with Volkswagen Group for sourcing parts for these electric vehicles and mentioned that it will be exploring a potential joint platform for India and emerging markets with the VW Group.
Speaking on the sidelines of an unveiling event, Rajesh Jejurikar, ED, Mahindra & Mahindra told ET, the company is putting in place all the key cogs in the wheel to lead the EV space in the future.
“A commitment of a billion dollars, a new brand, a grounds up platform and now partnering with a global major like Volkswagen Group to fix the back end allows us to take on potential opportunities not only in India but world over. It shows the rapid strides Mahindra is making in the EV space and we are confident of replicating our recent success in iconic brands into the EV space,” added Jejurikar.
The alliance conversation extends beyond supplying parts for passenger vehicles and commercial vehicles.
Thomas Schmall, Member of the Board of Management, Volkswagen AG, Technology says, the potential of this alliance is to do a cumulative of 1 million by 2030. “There are multiple areas of discussion we are in with Mahindra. One is developing a joint platform, cell localisation and supply of parts. We are also in discussion to use aggregates from the Mahindra’s Inglo platform.”
On a specific question on how much investment would this mean, Schamall was non committal on specifics, but added,
“If one were to localise the cells (in India), the investment could be over $2billion,” he added.
The joint platform could be used for India and other emerging markets. And locally Skoda may take the lead on the joint platform for EVs for the Indian market
Mahindra unveiled two new brands, created specifically to house the company’s EV portfolio – Iconic brand XUV with the Twin Peak logo in Copper and the all-new electric-only brand called BE. The EVs under the BE brand will come from its born EV architecture Inglo, the legacy products will come with XUV badge.
The manifestation of these two brands have been showcased via five e-SUVs: the XUV.e8, XUV.e9, BE.05, BE.07 and BE.09. The first four of these are to be launched between 2024 and 2026. This will allow the company to cater to a range of offerings from Rs 15 to Rs 35 lakh in the coming five years.
The company has already announced its commitment of over a billion dollars to aggressively participate in the EV race and it expects a significant 30% of its total sales to come from electric SUVs by 2027.
The company claims to bring in authentic electric SUVs with cutting-edge technology, through the three key strategic pillars of Brand, Design and Technology.
The vehicles under the BE brand aim to be bold, evocative with new design language that will target customers who want to define their life’s journey their own way while making a difference, said Mahindra in a statement.
M&M would be using the Modular electric drive matrix (MEB) of VW to make components such as electric motors, battery system components and battery cells in its ‘Born Electric Platform’ models to be launched from 2025.
It must be noted that MEB is an open vehicle platform, this would mean body and chassis can be separated from each other and it is suitable for different models ranging from compact to sedan to SUVs.
VW’s ID3 is the first car launched on this platform that would be followed by subsequent launches of ID4, ID5, and ID6.
The MEB platform was the base for ten electric models from five brands and was used to build around 300000 units in 2021.
VW has already collaborated with Ford to launch an electric crossover using this platform from 2023 and another one later, with a cumulative capacity of 1.2 million units over the six-year period.
After fund infusion announcement in its EV subsidiary of Rs 2000 crore from British International Investment at a valuation of $9 billion, M&M guided for earmarked investment of Rs 2000 crore in FY23 in EVCo and another Rs 8000 crore over FY24 to FY27 related to EV platform, products, technologies, EV exclusive manufacturing assets among others.
