Passenger Vehicles

Mahindra to launch electric KUV100, pitches for incentives for EV industry localisation  

by Nilesh Wadhwa Oct 10, 2017

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Dr Pawan Goenka at the launch of the facelifted KUV100 NXT in Mumbai today.

Mahindra & Mahindra has been at the forefront in the electric vehicle (EV) segment. It is the sole Indian automaker with a portfolio of commercially available EVs in the market. Now it looks like the vehicle offerings are transiting from diesel to petrol and now electric.

At the launch of the refreshed compact SUV, KUV100 NXT in Mumbai today, Dr Pawan Goenka, managing director, Mahindra & Mahindra, mentioned that the AMT version will be introduced in six months followed by an electric version of the SUV in 2018.

The KUV 100 gets a refresh in a shortest period of 18 months since its launch on January 16, 2016. Since then, the vehicle has sold a total of 58,450 comprising 30,790 petrol and 27,660 diesel variants.

According to Dr Goenka, the automotive industry is going through one of its most disruptive phases ever. “Mahindra is working on mainly five factors – demand for petrol vs diesel, increasing consumer expectations in terms of features, driverless technology which Mahindra has developed for its tractor that will help it for bringing it to vehicles, the shared mobility impact, and the impact of EV gains.”

He said, “No one can predict if EV penetration will be 20 percent or 100 percent by 2030. But one thing is sure – Mahindra will be ready and will have electric variants in all our SUVs, with the first electric KUV 100 to be introduced next year.”

Commenting on the multiple scenarios in industry, with less clarity on where the major thrust of investment should go, Dr Goenka said, “Is hybrid dead or will it come back? The industry is not sure.”

He said that there is a huge challenge of where the market is headed, and that automakers which have invested heavily in hybrids have been badly impacted with the heavy burden of GST. As regards shared mobility and its impact on industry sales, he said the impact cannot be known right now .

Commenting on M&M’s plan, he said, “There are too many different directions that the industry could go in, but we cannot afford to ignore anything. So the investments need to be done very judiciously. That’s why you see many alliances coming up in the industry, no one can afford to invest in everything in a complete way.”

Future EV investments, hydrogen-powered three-wheeler
Dr Goenka had last week said the company has invested around Rs 600 crore for electric powertrain development and is doubling EV production capacity to 5,000 vehicles per month. Considering new product development costs around Rs 100-200 crore apiece and with M&M planning around four new vehicles, it call for capex of Rs 800 crore, along with a new high-end EV platform that will see investment of around Rs 2,000 crore. Thus, the total investment in M&M’s EV ecosystem is estimated to be around Rs 3,400 crore.

Speaking to Autocar Professional on the different green technologies (hybrid, fuel cell and pure electric among others) and Mahindra’s investment in EV technology, Dr Goenka said: “There are three things we are working on. When it comes to petrol and diesel, we will not be stopping investment and for the foreseeable future it will remain the prime mover. More attention towards petrol engines – that’s what we have already been talking about since long. The second focus is clearly electric, and thirdly we will have some focus on hybrid if it makes a comeback.”

M&M also plans to offer petrol engines in all its vehicles, if not for India then for the export market, and the company would be happy to launch petrol variants if there is even five percent demand from the domestic market.

According to Dr Goenka, M&M is the sole OEM in India which has a vehicle that runs on hydrogen fuel. This is a three-wheeler offering that is being tested for the past two to three years. He revealed that the company is also in talks with the Central government for technology trials.

EV market in India
India at present sees a miniscule percentage of EV sales – roughly 10,000 vehicles per annum (majority two-wheelers). The big task for EVs would be to reach one percent of the total vehicle sales or roughly around 2,500 EVs per month. Dr Goenka believes real economies of scale will come only when the EV market sees 10,000 unit sales a month, and for OEMs it would depend on the percentage that they gain out of this market.

An EV has three major components – battery cell, motor and converter DC charging. Dr Goenka  says that battery cells will continue to be imported for a while, since India does not manufacture them at present. The company has recently announced plans for JVs with overseas partners for developing motors and converter DC chargers. Other than the battery, M&M will develop everything else for EVs, said Dr Goenka. “The important thing is if India does not localise EVs or the components, we will end up only with 30-40 percent value addition. Currently, 60-70 percent cost is due to imports. And my pitch to the government is to incentivise localise manufacturing.”

Commenting on the impact of EVs on the job market, Dr Goenka said, “The jobs that will be there for the future along with the value addition for EVs will be very different from ICE engines. There will be more software engineers as an EV platform has millions of lines of codes;  that will create huge employment for software engineers. However, people who are doing machining, for example, will go down significantly. Today, we don’t have a good handle on the per car manpower required to convert raw material to a finished product. We do not know as yet how much of a difference there is between the ICE car and EVs. What we know for sure is that the job will be of a different kind from what is there today. The biggest challenge is to have all this value addition to come to India, which is not prevalent today. If we do not look at it in medium to long-term basis possible, it is possible that we end up importing everything.”

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