Mahindra foresees up to 20% EV penetration in SCVs by 2030

Mahindra Last-Mile Mobility or Mahindra LMM, which is the leading electric three-wheeler manufacturer in the country, with sales of 6,140 units (+22% YoY) in September 2024, estimates EV penetration in the electric four-wheeler small-commercial vehicle (SCV) category to touch 20 percent by 2030.

The company says that while e-SCVs that see primary application in the cargo-carrying segment, were pegged at zero percent penetration in FY22 with no products on offer, the segment continues to be in its infancy with the current penetration growing to just 1 percent with a handful of products such as the Tata Ace EV (launched in May 2022) now available in the market. 

“This 1% penetration presents a unique and exciting opportunity for Mahindra LMM to foray into this segment, and we are certain that the penetration of electric four-wheeler cargo EV carriers will quickly scale to double digits in the coming years,” said Suman Mishra, MD and CEO, Mahindra LMM.

Mishra announced this at the launch of the company’s latest e-SCV - Mahindra Zeo - launched in two variants with an 18kWh and 21.3kWh battery pack options, respectively, in New Delhi. The Zeo has been launched at prices ranging from Rs 7.52 lakh to Rs 7.99 lakh, ex-showroom.

“The economic value proposition of an EV is the key driver of electrification in the three-wheeler segment. The industry was at 5% penetration when we started out in the L5 e-3W category. Today, it is at 20.5% and we expect it to grow to 50-55% by 2030. Similarly, in the 4W category, now that we have launched the Zeo, we expect to move the industry's 1% penetration to double digit within the next two years," Mishra said.

She added that there are a lot of takeaways from e-3Ws that can be horizontally deployed in the e-SCV category and explained that beyond the total cost of ownership or TCO, sustainability of EVs, too, is an enabler of the shift of SCVs towards electrification. “The transition will further accelerate with the strengthening of charging infrastructure with the listed incentives under the PM E-Drive scheme,” she said.

“Therefore, with the right product and price, the e-SCV segment will electrify at an aggressive pace going forward. The government is also, as a firm hand, pushing us for further localisation in this category, while support from financing institutions is also driving demand,” Mishra said optimistically. 

The company is offering the Zeo with just 5 percent down payment, as well as a battery-as-a-service (BaaS) option, with a monthly rental calculated at Rs 2.25 per kilometre.

Eyeing scale, expanding capacities 

The Mahindra Zeo four-wheeler electric SCV is based on a 300V high-voltage EV architecture. Powering its rear wheels is a 30kW e-motor that delivers 114Nm of peak torque. The vehicle is rated for a 765kg payload capacity and 200 cubic feet volumetric load capacity of its 2,250mm cargo box - aimed at ready application for e-commerce players and logistics providers.

“This is exactly what the market demanded and we have offered them with our latest product,” Mishra said, while adding that the company has already received orders for around 12,000 Zeos from logistics service providers across the country. 

While the company, which is the No. 1 player in the e-3W category with cumulative sales pegged at 47,930 units in the first six months of CY24 (H1 CY23: 38,837 / +23%), says it is well placed in terms of its network strength with over 800 existing touchpoints across the country, Mahindra LMM is also expanding capacity to meet growing demand for e-3Ws in the future. 

“As long as the pace of electrification continues, we expect a strong penetration. We are putting a lot of effort to increase our capacities, channel throughput and financing availability to ensure the best proposition for the customer,” Mishra said.

“While we have already done one round of expansion at our plant in Haridwar, we are now starting another round of expansion at Zaheerabad. We are parallely investing in capacity expansion at the two facilities,” she added.

The company says that although its all-electric products are high on localisation, with the Zeo qualifying for PLI benefits, eyeing scale is key to lower costs in the EV segment. “EVs need to reach a scale where the operating economics are extremely beneficial. There are ways to do it such as the e-3W and e-SCV categories, as well as exports,” 

As a result, while Mahindra LMM is also scanning export opportunities in markets such as Africa, and the ASEAN region, its target in the foreseeable future is to cater to the domestic demand for e-3Ws. 

“Since India is the largest exporter of three wheelers, we must electrify some of the international markets where there is movement towards electrification. Having said that, with only 20% penetration of e-3Ws in India, there is still a huge headroom for growth in the domestic market,” Mishra signed off.