Dr. Pawan Goenka: Reva buyout will boost our green technology initiative
The newly appointed chairman of Mahindra Reva talks about what the acquisition means for M&M.
The deal will give a big boost to M&M's sustainable green technology initiative. What impact will it have in the short and long term?
We will see the launch of NXR and NXG vehicles. The NXR will be launched by mid-2011 now, not by the end of this year. These are vehicles developed by Reva and showcased at the Frankfurt Motor Show. But there’s a lot of work to be done before they become production-ready. We will use M&M’s engineering expertise to help make them production-ready. That process I guess will take a year to a year and a half. We will also look at the Reva technology and assess its applicability in Mahindra products. Two immediate applications will be on Bijlee, that we’ve been selling for a long time but not in large numbers. And the second will be in the Maxximo where we’ve have developed an electric version, which is to be launched by end-2010. We will examine if Reva technology can help improve what we have done up to now. Over the long term, we’ll look at an electric vehicle (EV) platform. At present, the Reva sells in 24 countries but in very small numbers. We’ll pick, choose and decide which countries offer the maximum potential for EVs. We’ll also look at technology licensing options but that’s not the primary focus which is to develop products and sell them.
Will you consider setting up a separate retail network for NXG, NXR and other EVs?
No, we don’t think so. The EV business is still not going to be large enough to sustain a separate network. That is one of the reasons why Reva was not able to scale up as could not justify independent showrooms. Right now, Reva has only two outlets – one each in Bangalore and Delhi.
Will this deal help the niche EV tech turn into a mainstream tech very soon?
We certainly believe there’ll be a significant market for EVs in the medium term. Conservative estimates suggest a global market of 1.5 to 2.0 million vehicles by 2020-21. That’s large. If we can participate in that market with a 2.5-3.0 percent market share, it will give us good EV volumes.
What about India where the infrastructure has a lot of catching up to do?
I don’t believe Reva is behind in technology compared to the West. What has not happened so far for Reva is that it has not been able to demonstrate its technology with a product that the customer will be excited to buy, in terms of the overall features and comfort. With NXR and NXG, that will be taken care of. In terms of field experience of running EVs, Reva is way ahead of everyone else. With M&M on board, it should be able to match up to anybody else.
How do the NXG and NXR compare with conventional fossil-fuel vehicles?
If you look at the specs of the NXR, it does 0-50kph in 5.5 seconds. That is as good as any other mid-segment hatchback. The main benefit is in running costs. Even after you ammortise the battery cost which you replace in 4-5 years, it comes to Rs 2 per kilometre versus Rs 4 per kilometre for a small car.
In M&M’s own portfolio, what will EV numbers be in the mid- to long term thanks to the Reva deal?
From the Mahindra Reva portfolio, we expect to sell 50,000 vehicles annually in the next 7-8 years. From the M&M portfolio, our focus is on the CV segment and the Bijlee. I cannot predict now whether there will be a passenger car application of the electric technology in the Mahindra portfolio. We could take a look at a SUV like the Scorpio, or Xylo, and whether it makes sense to have electric version. My guess is that it
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