M&M EV
An automobile and an ice-cream cannot be compared in any way, except one. Like ice-cream, a part
of people’s desire to buy their favourite automobile, is their “drool appeal”.
Rajesh Jejurikar, executive director & CEO of auto and farm sector at Mahindra & Mahindra (M&M),
emphasises that customers must first desire their eSUVs with their right brain, and then use their
left brain to make it happen. He says, "We want customers to fall in love with our eSUVs; to want
them so badly that they'll find answers to all the practical questions later."
For most part of their legacy portfolio of vehicles (Boleros or tractors), M&M has used their practical
utility to target customers. That shifted with the new Thar followed by XUV 700. Now they are going
“full Bhangra” for their new BE 6 EV and XEV 9e EVs.
“There is a bit of Punjab in every part of the world,” says Avik Chattopadhyay, an automotive
branding expert. M&M is targeting customers who love vibrant parties and loud celebrations.
The cars are decked out with dazzling lights and sound systems that amplify their energetic vibe.
Plus, the key fob — electronic key — lets you park remotely, just like a remote-controlled toy car!
M&M hopes such a bold approach appeals to a specific segment of customers worldwide. By
targeting emotional and aspirational buyers, Mahindra's confident they'll drive sales and justify their
massive investments in SUV.
The cumulative EV investments have already moved to around INR5,804 crore between April 2021 to
September 2024, potentially rising to INR16,000 crore by March 2027. Crucially, EV investments now
make for around 45% of M&M’s total automotive sector capex. Mahindra says it has allocated
INR4,500 crore to the two newly launched eSUVs.
Designing desire
This approach builds on Mahindra’s experience with models like the Thar 3-door, which buyers often
purchase for its sheer allure, although they are not very practical vehicles for the city commute. The
company has also managed to convince people to buy top variants of XUV700 which cost INR30 lakh
on road. The eSUVs aim to replicate this, combining bold aesthetics with features that evoke
emotional connections.
However, desire isn’t enough. Pricing plays a crucial role in converting interest into sales. And the
aggressive pricing will overcome EV adoption barriers, says Veejay Nakra, president of Mahindra’s
automotive division.
M&M’s approach vs. Tata’s or MG’s
Mahindra front-loaded heavy investments, by building these EVs on an electric platform, is built
from scratch. In contrast, Tatas have modified their existing ICE platforms to build their EVs. That is
why M&M capital investments are higher, and therefore Mahindra needs to achieve higher revenue.
Even currently Tata Motors caters to different segments, which is evident from Tata Motors PV
revenues being at INR11,700 crore as compared to auto segment standalone revenues at Mahindra
being at INR21,110 crore in the quarter ended September 2024. While Mahindra’s auto revenue
includes commercial vehicles, SUVs overwhelmingly drive its performance.
Mahindra’s most popular vehicle is the Scorpio, while Tata’s bestsellers are smaller SUVs like the
sub-4-meter Punch and Nexon. Mahindra focuses on larger electric SUVs (over 4 meters) that benefit
from a 5% GST rate, narrowing the EV premium over ICE vehicles in a segment where ICE SUVs are
levied 50% taxation.
In electric, most of the popular models are under INR15 lakh, be it the MG Windsor, Tata
Punch, Tiago or even variants of Nexon EV. The MG Windor has a 38-kwh battery as compared to
the 59 and 79 kwh batteries from M&M.
Lower cost of ownership is a big factor in buying existing EVs, and EVs tend to be bought by people
who are high milers but have fixed predictable routes. M&M wants to go in the opposite direction
and sell on the “wow factor” from design and technology.
Tata Motors is facing growing competition in the EV market. Its volumes declined 11.2% YoY in the
first eight months of FY25, with market share dropping from 68% in November 2023 to 49% in
November 2024, according to Vahan data. MG’s Windsor EV has outpaced the Nexon EV for two
consecutive months, becoming the top-selling EV.
Tata Motors has thrown everything in – price reductions, new launches like Punch.ev and Currv.ev
and even setting up separate sales channel to offer a differentiated experience to buyers. This
signals the need for fresh catalysts to drive the next phase of growth.
Addressing buyer concerns
Mahindra recognises that EV adoption comes with hurdles. Concerns around range, cost, and resale
value remain barriers for many buyers. To address these, the company is exploring a range of
innovative solutions:
Range anxiety: The eSUVs come equipped with a robust 59 and 79 kWh battery, which is likely to
offer 400 km and 500 km in real world range addressing concerns about long-distance travel. Most
users will only need to charge their vehicle two or three times a month, offering convenience for
urban and suburban drivers.
Pricing and accessibility: By pricing its EVs closer to ICE (internal combustion engine) models,
Mahindra is lowering the financial barrier to entry.
Resale confidence: Plans for buyback guarantees and lifetime battery warranty to the first buyer aim
to reassure potential buyers about long-term value and maintenance costs.
“We don't want you to buy our eSUVs just because they're practical; we want you to buy them
because you genuinely want them. And when you do, you'll realise you're not paying much for fuel,
and you don't need to charge them often — maybe just two or three times a month, or even once a
week. Who drives 500 kms a week, anyway?” says Jejurikar.
“Mahindra has been genuinely working on the strategy of first getting into the customers’
mindspace and it has been working for them,” says an industry expert. This has to be backed by
strong market research. They have managed to do that in the last three launches and even in EVs
they have managed it quite well, he noted.
Product positioning and profit targets
The electric-car market was shifting towards 'race to bottom products', says a top Mahindra official.
Electric cars were becoming the third car in households, primarily used for utilitarian commutes. As
new products are launched with lower prices, buyers were opting for the cheapest EVs. Thus,
despite massive discounts, the Mahindra XUV 400 didn't sell well, teaching the company a valuable
lesson.
The company expects that over a period of time, ICE & EVs will have similar net variable profit
margins per vehicle in absolute rupees, calculated as the selling price minus variable costs (material,
warranty, freight, manufacturing). The revenue realisation per EVs is much larger and the
percentage profit margin will be lower than ICE.
Can M&M sell 10,000 EVs a month?
The company hopes the two models could ramp up to 7,500 a month which can be increased to
10,000 units monthly. The target market for the two models is the top two variants of UV 1-3
segments for a combined monthly volumes 41,000 units. The company expects this to sell in urban
India, not just in top 10 cities but more widely in the top 50-75 cities of India.
The BE 6e is more driver focused and intended to get new set of customers who haven’t considered
a Mahindra product while the XEV 9e which has some similarity with the XUV700 is for the more
mainstream family buyer.
However, the 10,000 units is “a tall target” says an analyst at a domestic brokerage. The price of the
variant with 79 kwh battery will be high and is likely to restrict the volume. Moreover, the monthly
sales run of EVs itself is smaller than what the company is targeting.” Electric car retails in India have
been hovering around 8,000 units a month so far this year.
“Even the Thar Roxx and Scorpio N had a tremendous pull with high bookings, but it didn’t translate
into that kind of monthly sales. Not to forget here we are talking about an EV. Thar as a portfolio will
reach 10,000 units mark only now," says a company dealer.
That said, the EV category is expected to get a major boost in 2025 when all major OEMs will put
new products and invest heavily to popularise and try to remove the hurdles to EV adoption.
Mahindra will be doing its bit, it is likely to take some more initiatives like offering a buyback,
leasing, and subscription schemes, said a person aware of the company’s plans.
Resale of the EV model is another common concern which M&M is likely to address by announcing a
buyback scheme closer to the models going on sale, the person said.Battery replacement concerns
can be assuaged by offering a subscription model. “I won’t be surprised if the company comes up
with these as their ambitions regarding the scale of the business is really high,” the person added.
On criticism on dependence on global suppliers
M&M has been criticised in some circles for sourcing key components from global suppliers.
Although this isn’t something very different from the industry practices. Jejurikar says suppliers' help
in leapfrogging technology is critical. It's not just about the battery, motor, or music system. Around
250 software professionals work for Mahindra out of Coimbatore, but a total of 2000-3000 software
engineers have worked on the e-SUVs, mostly from automotive-focused software companies. Also,
M&M says it owns the IPs that differentiate its products.
The capital investment and the ownership of IP are clear indication that M&M is playing on high-
roller table. Now to wait and see if they can cash in on their chips.
