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‘Mahindra is on track to take leadership in EVs’

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The decision by U.K.’s development finance institution, British International Investment (BII), to invest ₹1,925 crore in a new EV company being set up by Mahindra & Mahindra is an affirmation of the group’s vision for the business, says Anish Shah, MD & CEO, Mahindra Group. Excerpts:

What does this deal mean for M&M?

For us, this deal is really a value unlock for our shareholders. We have a marquee global investor coming in looking at what our path is, what our products are, and saying ‘yes, we think you’re on the path to leadership here’. So that’s really what it means for us.

Where will the electric business be housed?

Mahindra Electric had a bunch of things which we folded back into the main company. We wanted to have a clean slate to start with. So, this will be the first spin off in that sense; this is for passenger four wheelers only and it is going to be asset light. All manufacturing, product development will stay in M&M and be used by this EV company. This company can use M&M brands as well; it may develop its own brands. And the rest of electric stays in M&M, which is three wheelers and electric LCVs — which will happen in future.

What is the investment plan for this new company?

The investment plan between FY24 to FY27 is ₹8,000 crore. Product roll-out is something we will talk in detail on August 15. But there are a set of products that we have got, that will start rolling out.

And the plan is to have five products, including 4 born electric?

That’s correct.

How will you fund capex?

Today, our cash generation is strong enough to take care of that company. And that part of the capital we have put out as well. So this deal is not just to get money for itself, [but] also to establish the value unlock and… a valuation. And to bring in a very strong partner who can help us in multiple things as we move forward.

You spoke about achieving leadership in the passenger EV four-wheeler segment. Currently, Tata Motors has the leadership… what gives you the confidence?

We are very confident based on the success of our current products because consumers will see the current in totality. Electric is one aspect of the car. And if you look at the five blockbuster launches we had, that gives us a lot of confidence in our manufacturing abilities and our engineering skills to be able to develop world class products.

Second, on the electric front, we have actually developed a fair amount of capabilities there. And that aspect of the answer you will get on August 15, when we will talk specifically about what is a platform. Why is that a very well-developed platform.. What are the cars that are coming out, the range of cars, that will come out in full order. So that gives us a lot of confidence that we are on track to take leadership.

And endorsement from someone like BII helps a lot in terms of, them saying that, yes, we are on track.

What assets are coming into the new company?

So, it going to be asset light. There is going to be the work on passenger electric right now. We will come into the new company and the valuation of assets will happen over the next three or four months. And at that point, we will have a better sense of what that evaluation would be.

The company’s strategy to introduce the classic vehicles in new form has worked out very well. What is happening in the overall company, and what is the way forward?

Really there is a lot of excitement. Because a lot of successes we have seen, not just in the auto business, but our tractor business has also done very well. It has gained market share. Farm machinery has started to gain market share, Mahindra Finance has done very well. Tech Mahindra is improving and is in a very good track. All other businesses are also well-positioned right now. Today, there’s a lot of excitement across multiple businesses. And we are seeing the value creation story playing out. Because for us, it is more important to deliver what we said. And the results will follow.

Your subsidiary Automobili Pininfarina was to introduce electric hyper car Battista. When will it hit the road?

Battista will start to be sold in the next three months or so as it is finally getting onto production. We are in the final stages of production now. And that is the focus right now, which is to finish the production, get the sales, and deliver the sales, which will help us to get the returns for the investors.

Will only up to 125 cars be produced and sold globally?

No, we haven’t [decided]. That is something we will look at over the lifetime of the vehicle. But we have got a good number of orders in right now. So, as we close production and start fulfilling them, we will have a better sense of what the trajectory per year is. The price of the car is €2 million. So, in the next three to six months, we will have a better sense of exactly the number of units for that particular year.

What is the situation with regard to chip supplies?

Chip shortages have now eased. There is no issue from the standpoint of some China COVID-related lockdowns that impacted certain parts coming in. That impacted production to some extent in a small percentage.

What is the demand scenario for passenger vehicles?

For us, it is very strong. For other companies, I haven’t seen those numbers as yet. But at least what we are seeing in bookings for all of our main vehicles, especially all the new ones, we see very strong numbers at this point.

How many new product introductions are planned for the main business?

For the main business, nothing in the immediate future, I mean, the refreshes and things that will come in, but nothing that is brand new in the immediate future, because we have just got five brand new launches. And now the focus is on electric. So the next set of brand new launches will be electric.

What is the broad focus area at M&M?

Sustainability is very important for us. And which is also a key reason for us to bring in BII as a partner. So, this is a step forward in us translating our commitments to action, in terms of doing something tangible.



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