Swaraj Baggonkar Moneycontrol News
Despite the government’s high decibel campaign for shifting to electric mobility, India’s biggest manufacturer of electric vehicle Mahindra & Mahindra (M&M) is fighting mounting losses amid declining sales.
A Bengaluru-based subsidiary of M&M, formed out of a buyout of Reva Electric Car Company in 2010, manufactures electric hatchbacks, sedans, vans, three-wheelers and buses. It is the only manufacturer of electric cars that retails locally.
Mahindra Electric Mobility (formerly Mahindra Reva), a subsidiary of M&M, has seen its accumulated losses since 2010 balloon to Rs 686 crore as of March. Last fiscal, its losses increased 14 percent to Rs 129 crore as compared to Rs 113 crore in FY17.
The company's struggle to convince consumers to buy its e-cars is in sharp contrast to the hype around electric vehicles, which the government has been promoting to reduce pollution. Tata Motors and Maruti Suzuki are also racing against time to launch electric cars, the first of which could debut next year.
According to data shared by the Society of Indian Automobile Manufacturers (SIAM), sales of Mahindra's electric passenger vehicles such as e2o and eVerito dipped 24 percent last fiscal to 646 units.
High acquisition cost of battery-powered vehicle has kept consumers at bay. For instance, the Maruti Suzuki Baleno, India’s largest-selling premium hatchback, is priced starting Rs 5.5 lakh (ex-showroom), whereas the Mahindra e2o, the cheapest all-electric car on sale, is priced at Rs 7.46 lakh.
Limited driving range and few charging stations are some of the other reasons why electric vehicles have failed to take off in India.
However, as per M&M, its total electric vehicle (all electric vehicles) sales increased 12 percent last year thanks to the B2B market. Following this, total income increased 8 percent year-on-year to Rs 129.41 crore.
M&M has committed a delivery pipeline of nearly 6,500 electric vehicles in the current fiscal, including Phase II tender of 4,800 vehicles to Energy Efficiency Services (EESL). The pipeline also comprises Letters of Intent signed for 1,000 units to Bhagirathi Trans Corpo and 500 units to Zoomcar.
Owing to the slowdown in demand for adoption of electric vehicle (EV) in the personal mobility space due to prohibitively high purchase cost, M&M is now targeting the commercial space for sales.
“Currently, Mahindra Electric is re-aligning its focus on B2B business development initiatives and new mass mobility products like e-auto and e-rickshaw to increase sales,” the company said.
In May, M&M signed a memorandum of understanding with the Maharashtra government for the next phase of expansion, committing an investment of Rs 500 crore.
“The company continued to invest in R&D, development of new EV models and technology platforms and capacity expansion, which consumed a significant part of financial resources,” the company added.
M&M has committed to launching a fully electric version of the KUV100, a mini sports utility vehicle. Work is on to roll out a hatchback with an electric powertrain in the next 2 years.
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