Mahindra & Mahindra ups stake in e-mobility

by Sumantra B Barooah 23 Oct 2018


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Under the revised strategy, vehicles are just a part of the overall game for Mahindra Electric Mobility.

Despite a lack of absolute confidence in electric vehicles so far in India, Mahindra Electric Mobility, an M&M subsidiary, is drawing up bigger plans than ever before, which includes a major R&D centre in Bangalore, exclusively for electric mobility.

Two years ago if one asked Mahindra Electric Mobility's CEO, Mahesh Babu, if an electric autorickshaw should be conceived, he would have said it “doesn't make sense”. Now, he and his team are getting ready to launch the Treo, Mahindra's first electric autorickshaw with lithium-ion battery technology. The change in the EV maker's approach is related to the "reset" of its vision in 2016. Ever since, it is on a journey of discovery and development, which will continue. "The mobility space is giving us a lot of learning and being a part of it you will learn and you will create products which are the need of the customers and the society," Babu tells Autocar Professional

The three-wheeler segment could become a major arena for Mahindra's electric mobility play. Few may recall that M&M's e-mobility journey began with a three-wheeler in 1999 with the 10-seater Bijlee. Things didn't move as planned, but now with electrification as a major megatrend the story could be different. With the e-Alfa mini and the soon-to-be-launched Treo, Mahindra Electric Mobility is betting on the potential of last-mile connectivity in emerging India. With the boom in e-commerce and the overall growth in the economy, there's a "very high potential" for Mahindra to launch electric cargo carriers too.

Given the focus of the government to promote mass-scale electric mobility mainly through people- carriers, Babu sees "huge potential" for the entire autorickshaw segment to go electric in five years, provided the charging infrastructure is in place. "That's what we will look at with governments very actively because the current way autos are running, it is not efficient in terms of emission pollution," says Babu. Hence, he wants the Treo and its derivatives to be successful.

Global R&D centre for e-mobility
M&M entered the electric mobility industry seriously in 2011 when it acquired Reva Electric Car Company, India's first electric car OEM. However, it realised within a few years of takeover that building and selling only electric cars is not sustainable and tweaked its strategy to be a technology and mobility solutions provider. The aim is to be a technological company with its own IPRs and technology which will be "unique and create differentiation with respect to others". Towards realising that vision, Mahindra Electric Mobility will set up a global R&D hub with an investment of Rs 400 crore. The investment is part of the Rs 900 crore capex plan over the next 2-3 years. The facility, which will come up in a 15-acre plot near the Bangalore airport, is expected to be an equivalent of Mahindra Research Valley – M&M's R&D hub for the conventional auto and tractor business. Steve Woolly, CTO, Mahindra Electric Mobility, will be responsible for the new R&D hub which is expected to be up and running in FY2020.

Focus on multiple solutions
After resetting its vision, and a change of name two years ago, Mahindra Electric Mobility has been tweaking some of its business strategies as it progresses. Many start-ups also approach the company often with lots of ideas, some of which, Babu says, are quite innovative. And innovative is what the company wants to be. That led to the development of Nemo, a cloud-based platform that enables efficient electric mobility services, and grid connectivity, enabling energy from the vehicle also to be used for electricity, which was first introduced in Auroville under an MoU between the two parties.

"We have already talked about vehicle to house, vehicle to grid, V2G2H and things like that. Hence, if we go deep, Mahindra Electric will do only things which are clean energy. We will only be interested in making clean energy, percolating into communities and things like that," says Babu. Soon after the inking of the MoU with Auroville, Babu received a call from the Pondicherry smart city team to demonstrate the Nemo application and its benefits.

The e-Cosmo stands to gain from the government's focus on public transport to promote mass-scale electric mobility

The shift of focus from chasing individual customers to institutional sales is helping the company gain ground. The single-biggest order it won is from Bangalore-based Bhagirathi Travel Solutions to supply 1,000 e-Veritos. Another fleet operator Lithium has been a customer for quite some time. M&M is betting both on electric mobility and shared mobility. It picked up a 16 percent stake in Zoomcar for Rs 176 crore earlier this year. And Zoomcar is now also a customer. The EV maker has posted a loss of Rs 129 crore on a turnover of Rs 129 crore in 2017-18.

The three-wheeler market will see strong focus by Mahindra Electric Mobility

The overall e-mobility story in India has not developed as expected or predicted. That has also affected Mahindra Electric Mobility's plans. It is still far from becoming a profitable entity and new initiatives could help drive it faster out of the woods. In terms of annual sales volume, Babu wants to hit the 100,000 mark in the next 3-4 years. And he's plugged into that green growth vision.

(This feature was first published in the 1 August 2018 issue of Autocar Professional)

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