M&M to invest Rs 900 crore more into electric vehicle venture

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The Mahindra Group on Monday announced fresh Rs 900-crore investment in electric vehicles (EVs) over the next four years, which should ramp up its first installed capacity to 5,000 units a month.

M&M, EV, electric vehicle, new venture, investment, India
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“We have already invested Rs 600 crore in EVs over the past five-six years and have decided to invest Rs 400 crore in Karnataka and Rs500 crore in Maharashtra over the next four-five years. This will be used for capacity, technology and products,” managing director Pawan Goenka told reporters in Mumbai, as stated by Livemint.

“We are not waiting for any policy to move forward. To be a pioneer, you have to create the road and we have to move forward,” he said on the sidelines of the ongoing Maharashtra investor summit. Goenka, however, said there is a need for the prevailing subsidies on EVs to continue for longer to ensure growth of this industry.

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Once it touches a critical mass of say 2 lakh units a month, which he expects by 2022, it will be on an equal footing with the conventional internal combustion engine-based vehicles, he said. At present, Mahindra has a capacity of 400 units a month, which will go up to 1,500, including three-wheelers by this September, he said, adding by next December they should be capable of rolling out 4,000 units.

The current investment plan aims to take the capacity to 5,000 units a month and is based on certain assumptions like the subsidies continuing, Goenka said. He said the company will be doing all parts of the EV play, except batteries, which require greater volumes for local manufacturing and so they will have to be imported. Goenka said at the current demand for EVs is so low at under 300 units a month, but said he is confident of better days and that the additional investments as “leap of faith”.

In what has been termed as a volte-face by government, Union roads minister Nitin Gadkari had last week said there was no need for a separate policy on EVs. The minister had earlier said that such a move was in the works. Following this an industry lobby is reportedly meeting Union heavy industries minister Anant Geete and Niti Aayog chief executive Amitabh Kant. Goenka, however, said there has not been any “u-turn” by government, as there are already beneficial moves like differentiated GST treatment and EV policies by states like Maharashtra which is “enough to get the industry going”.

He was, however, not so supportive of government’s earlier plan of turning 100% electric by 2030, terming it is “too ambitious” and said there is a need to “walk more, before we start running”. The auto industry veteran said we should be satisfied even if we achieve 30% EV share by 2030, and enlisted global adoption experiences to buttress his point.

He also sought to placate the concerns of auto ancillaries, saying the industry will continue to grow at 4-5% even in the decade to the 2030s which will give such companies sufficient business. Meanwhile, addressing the summit, Tata Power executive director Ashish Khanna said technology has not changed so much on the solar front, which may justify “grid parity” that is seen in new bidding at rates as low as Rs2.45 per unit, reported Livemint.

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