The EV journey has only started in India - Rajesh Jejurikar

A period of intense growth has given way to a phase of recalibration as automakers adapt to changing customer expectations, regulatory shifts, and the unpredictable impact of global supply dynamics. Within this evolving landscape, Mahindra & Mahindra (M&M) has redefined the modern SUV for India and has set ambitious goals for electrification going forward. 

In this exclusive Q&A, Rajesh Jejurikar, Executive Director and CEO of Auto & Farm Sectors at M&M, shares insights into how the company is steering through these complexities. From the demand for premiumised, adventure-ready SUVs to M&M's bold moves in the EV space, Jejurikar paints a picture of a company ready to meet the future head-on. 

After two years of strong growth, the Indian passenger vehicle market entered a consolidation phase in 2024. How would you assess the year gone by, and what are your expectations for 2025?

Industry growth in the first half of FY25 slowed, driven by two key barriers, one of which was the elections, which led to a reduction in overall government procurement of vehicles. Secondly, there were climatic barriers with heatwaves across parts of the country and flooding in many parts.

The SUV segment, however, has been growing strong, currently at about 65% of the PV market compared to 60% a year earlier. This indicates a preference shift for consumers, and M&M, in particular, solidified its position as the leading SUV player in India. The just-ended festive season saw a strong performance from OEMs across the industry, and M&M also had a very strong performance. SIAM has projected industry growth of 3% to 5% for passenger vehicles. M&M expects its UV sales to grow in the mid to high teens.

What is your assessment of the Indian market's long-term growth potential?

We are quite bullish on the long-term potential offered by the Indian market, particularly in the automobile sector. Low car penetration compared to other economies underlines the upside that still exists. As incomes rise and car ownership becomes more accessible, the demand for passenger vehicles is bound to increase.

The country is expanding its road network at an unprecedented rate, which is a key factor driving PV penetration. Moreover, M&M should benefit from this trend, given the segments that M&M plays in, where customers are looking for vehicles that allow intercity travel enabling adventure and exploration. Changing aspirations, a large youth population and enabling government policies such as the Automotive Mission plan (AMP 2026) are other factors that will aid growth.

Regarding the emerging electrification space, the adoption curve seems to have slowed after an initial surge. Are you concerned?

Last Mile Mobility is leading EV penetration in India. A recent quarter saw a 20% penetration level and we expect this to grow dramatically. Mahindra Last Mile Mobility is currently the market leader in 3 wheelers with 43%+ market share. We would like to thank the govt for their support on electric three-wheelers through PLI, GST, FAME.

Electric PV penetration is currently only 2%, and the journey has only started in India. Hence, we are at a stage very different from the rest of the world. Other economies have penetration in the range of 15-30% even upwards of that. 

The growth may have seen some fluctuations, but the trend is in very early stages to read much into these fluctuations. Also, EVs are the destination technology given they are zero-emission vehicles, as we are observing in most other economies such as China, the EU, and US.

Our belief is that what the EV market needs in India is really 'Wow' products. People buy wow products, and if the product has the right proposition, it will sell, and penetration will go up. Moreover, EVs offer an amazing drive experience with acceleration, enhanced tech, and all the other features that the market will see as Electric Origin vehicles are launched.

How do you envision the future powertrain mix? How will the demand for petrol, diesel, hybrids, and EVs evolve?

We believe that EVs will be the destination technology. They are the most advanced from a technological standpoint, help from an environmental standpoint, have no emissions, and will reduce the fuel import bill for a country like India.

There are some benefits to hybrids from a fuel efficiency standpoint, but they are still very marginal. Hybrids are also more expensive to build because they have two powertrains. Governments around the world have largely stopped providing incentives for hybrids over the past 20 years as they are expensive and do not support much emission reduction.

The future powertrain mix will evolve considering these factors, and we believe our portfolio includes a wide range of ICE models, putting us in the ideal position to navigate the transition to electric mobility.

From a consumer demand standpoint, if hybrids become a big factor, M&M will be ready for it. We will also be ready for hybrids if there are significant changes in the technology that make hybrids much more efficient. At this point in time, we feel good about the focus on EVs. But we are ready for hybrids; we are looking at hybrid technologies closely and will continue to adapt as they develop.

Some experts fear that Mahindra & Mahindra is overinvested in the EV space given the slowing penetration of Battery Electric Vehicles. What is your take on this?

M&M's investment in EVs aligns with a carefully crafted long-term strategy aligned with our view on EVs. Electric SUVs are a critical component of Mahindra's growth strategy, and our aim is to make 20-30% of our SUV portfolio electric by 2027. 

Our Electric Origin Vehicles will be products of desire, which customers will want because of their disruptive offerings. These will be lifestyle vehicles with an EV powertrain. Our BEV portfolio is built on the all-new INGLO platform with long-range batteries and high-powered motors. We will provide cutting-edge design and technology, including ultra-fast charging and a futuristic human-machine interface (HMI), along with exceptional safety standards. They will offer the latest technology and features that were not accessible to the mass-market UV segment in India so far.

Securing battery technology is crucial to mitigate global supply chain uncertainties. When do you anticipate localising battery cells?

At M&M, Mahindra is focusing on a multi-regional battery procurement strategy, leveraging partnerships with global leaders to ensure consistent supply chains. By diversifying our sourcing, we reduce dependency on any region and mitigate potential impacts from localised disruptions.

We are actively exploring the option of localising battery cells in India and are already in discussions with industry players in this space. Cell localisation is a priority, as it would further strengthen our supply chain and support our long-term commitment to the Indian EV ecosystem. We would do it in partnership, and there could be multiple constructs to that partnership. But we are very actively looking at it.

What will be the key drivers of growth in the future, and what challenges or headwinds do you foresee for the market?

Besides the macroeconomic factors, other key factors that will play a role include:
• Well-differentiated 'Wow' products that offer a distinct value proposition to the customer. For example, M&M offers vehicles with an adventure-ready capability, unmissable presence on the road, and a good level of sophistication. Moreover, our product line-up is fresh in terms of the age of the product, with most of the products launched in the last 3-4 years.

• Technological innovation: Customers want an amazing experience inside the car, and technology continuously enhances this experience. Earlier, our customers used to buy us for better mileage, but today, our customers buy our vehicles because of the tech, premium design, and features we bring to our vehicles. Around 75% of XUV700 sales today are for our top variants, AX7/AX7L. This speaks of the premium segment we are attracting today. Cars are gradually becoming Software-Defined vehicles (SDVs), which allow seamless integration of functions across the vehicle and updates over the air.

• EV Adoption: India is on the cusp of evolving a new category. Cutting-edge technology and design in our Electric Origin vehicles will drive customer appeal. Mahindra is poised to play a key role in India's electric vehicle transformation with an exciting lineup of upcoming EV launches. Our Electric Origin vehicles will be lifestyle SUVs with the best global design and category-first technologies, features, and performance based on our grounds-up INGLO platform.

• Global Expansion: There is a great opportunity for the auto sector to 'Make in India, for the World' with proven ability for world-class offerings via products featuring class leading performance, technology and safety benchmarked to global standards. Mahindra's expansion plans include a phased and calibrated approach to sell in markets such as South Africa, Australia, New Zealand and Europe. 

Meanwhile, there are also challenges and headwinds. They include:
• The PV industry has seen slow growth recently and urban uptake has slowed.

• Economic fluctuations and low interest rates will affect this industry since credit plays an important role.

• Government policies are instrumental in driving growth; however, regulatory changes (e.g., EV subsidies) can create uncertainty, affecting investment planning and strategic direction.

• India's charging network is evolving and needs to grow further to scale EV adoption in India. The charging infrastructure will also scale as the market sees 'wow' products being launched, supplemented by Government schemes such as the PM e-Drive scheme.

The average selling price for vehicles in India has increased due to regulatory changes and consumer preference for premium features. Do you expect this trend to continue or slow down?

The average price of a car in the PV industry has increased from around Rs 7.6 lakhs in 2019 to around Rs 11.5 lakhs in 2024. Two factors have mainly driven the price increase. First is regulatory mandates involving emission norms (e.g., BS 6.2, CAFE) and safety, and the second is that the customers are becoming more value-conscious, as different from being cost conscious.

We have observed a clear shift in consumer preferences towards vehicles with advanced features, cutting-edge technology, and improved safety, which has driven strong demand for our premium SUVs, including the XUV700, Scorpio-N, and the Thar. We believe that if the customers find value in the additional price they need to pay, a lot of them are fine paying a higher price.

M&M is an SUV specialist and has capitalised on the SUV wave, which accounts for nearly 65% of the market. What level do you expect SUV penetration to reach by 2030?

The SUV segment has seen remarkable growth in India. For instance, the share of SUVs in the passenger vehicle market grew from 11% in FY2012 to 65% in Q2-FY2025. At Mahindra & Mahindra, we have capitalised on this trend and established ourselves as a leader in the ICE SUV segment with popular models like the Scorpio, Bolero, XUV700, XUV 3XO, and Thar. Our Revenue Market Share in the SUV segment has increased from 13.6% in FY21 to 21.7% in FY25 YTD

How do you view other body types like coupes, crossovers, sedans, and hatchbacks? Do you expect further segmentation within the SUV segment?

Customer preferences have gradually moved towards more space in the car, e.g., a larger headroom, more space for ingress and egress, better visibility from the car, and so on. Accommodating these preferences has led to cars being designed with the UV form factor across a wide range of price points and across the categories of compact SUVs, mid-size SUVs, and full-size SUVs.

What is your view on partnerships and alliances? How critical are they for future growth in the automotive sector?

Partnerships and alliances are essential for growth in the automotive sector, especially with the shift towards electric mobility. Collaborations allow access to advanced technology, share risks, and accelerate innovation.

M&M has performed exceptionally since 2020, achieving over 15% growth in 2024. Do you expect this strong double-digit momentum to continue?

We are optimistic about sustaining this momentum due to a strong product pipeline, including nine new ICE SUVs and seven Electric Origin vehicles planned by 2030. This positions us well to capture the growing SUV market. We are also increasing SUV production capacity to 64,000 units per month by FY2025, or about 3.5x over five years, facilitating shorter waiting times. While SIAM has projected passenger vehicle industry growth of 3% to 5%, M&M expects its UV sales to grow in the mid-to high teens.
 
What key learnings emerged from the semiconductor crisis, and how has M&M fortified its supply chain to prepare for future disruptions?

Some of the steps we took to be better prepared include improving supply chain visibility, building alternate sources, having more stock for critical components, and proactively planning to manage such disruptions.