Saturday, September 30, 2023

Mahindra Electric nearing fresh investment deals


Mahindra Electric, Mahindra’s e-mobility wing is in talks with e-commerce companies like Flipkart, Amazon, and Reliance Retail, among others, in a bid to tap into the burgeoning demand for the last-mile goods delivery segment, revealed Mahesh Babu, CEO, Mahindra electric.

Mahindra Electric has been in search of investors for quite some time aiming for growth. The company is now nearing the deal with few e-commerce players as its strategic investors, revealed Mahindra’s MD and CEO Pawan Goenka. “We have got significant interest from many players from e-commerce providers, financial and strategic investors, and we are in the process of finalising the deal with one or two of these players,” said Goenka.

M&M is looking at private equity funding for Mahindra Electric, as part of its turnaround strategy. As M&M indicated, it will not sell the stake in Mahindra Electric, but open to funding from private equity investors. As Pawan Goenka said, “Until we have outside investment, M&M will continue to invest in Mahindra Electric, and that will continue as per requirement.”

Despite the electric mobility segment taking a hit along with the entire auto industry, due to the coronavirus pandemic, India’s largest electric vehicle manufacturer is still betting big on the segment. M&M has not deferred any Capex in the electric mobility space. Interestingly, Mahindra Electric has seen its market share grow from 2% last year to about 4%.

Mahindra Electric has earmarked an investment of Rs 500 crore for setting up an EV technology and R&D centre near Bengaluru airport. Foundation stone of this centre will be laid in the coming weeks. So far, Mahindra has invested Rs 1,000 crore in the sector.

As the homegrown automaker believes, the electric vehicles in the shared transportation space will take a backseat due to the Covid-19 pandemic. However, the small electric vehicles deployed in the last-mile cargo delivery sector will grow at a fast-pace in the near-to-short term.

In the wake of the Coronavirus pandemic, online delivery services have increased significantly and the momentum is likely to continue. With several company’s focus on electric mobility, Mahindra Electric is aiming to grab a large chunk in that segment with its new strategy.

As M&M MD and CEO Pawan Goenka said, “This is for the simple reason that the commercial viability of electric three-wheelers has now been firmly established. It’s less strenuous and easier on the wallet to drive an e-3W and the whole value proposition of using such vehicles has sunk in.”

The M&M boss also revealed that while the sales of electric vehicles including the e-Treo has lost some momentum, the volumes are now picking up. “There was a bit of a loss of momentum. In January and February, we had reached a volume of about 500 per month of Treo which almost came down to zero, but now it is picking up, and we are back to pre-COVID levels,” said Goenka. According to him, ride-sharing or the fleet operator segment will take 6-9 months to bounce back to normal.

Mahindra Electric Atom
Image: FB

However, despite the anticipation that electric vehicles in the shared mobility space will take a backseat, M&M is not changing its launch plans in the segment. The automaker plans to launch its e-KUV100 small electric SUV in three months, which will primarily target the fleet segment. Also, M&M will launch the Atom e-quadricycle by the end of 2021, which is the electric variant of S2101.

At the Auto Expo 2020, Mahindra Electric showcased a new electric vehicle platform called MESMA 350 and the e-XUV300 concept as well.

The automaker has just launched Treo Zor at Rs 2.73 lakh (ex-showroom), an electric three-wheeler, meant for last-mile cargo delivery. It will target the retail and e-commerce segment.

Also Read: Are electric vehicles in India going to be cheaper?

Team AFT
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