Mahindra's EV Output Hits Capacity Ceiling as Demand Outruns Supply: Mahindra Electric MD

Mahindra Electric Automobile has reached its structural capacity of 8,000 units a month and is struggling to keep up with demand, Managing Director Velusamy R said at Autocar Professional's EV Conclave in Delhi on Tuesday.

Asked whether buying factors were shifting beyond running costs, Velusamy said the EV "has got the imagination of the people" and "has entered into the mainstream". Demand is also building in Tier 3 and 4 cities, where wealthy farmers and businessmen, "die-hard diesel fans", are switching for the 500 km range and a quieter drive.

"We are starting to sell 10 vehicles per dealer. There is huge demand, but we are not able to supply. That is a huge concern," he said.

On how Mahindra would clear its bottlenecks, Velusamy said new capacity takes six to 12 months, depending on the lagging component. Disruption linked to the West Asia conflict has hit aluminium supply, while steel and copper suppliers must "gear up". Additional capacity will come from Q4 of FY27, and supply should "fall in line" by Q3, he says.

For buyers, the gap between Rs 3,500 at the petrol pump and Rs 500 to charge is, he believes, "playing in their mind".

On whether Indian makers should start with right-hand-drive global markets, he said Mahindra's six-month study found EV buyers there "do not look at the OEM name," unlike ICE buyers. EV sales there are growing by 40 to 130 percent.

European makers' comparable EVs are priced "far higher" than those of "the neighbour", referring to China, while Mahindra's could be competitive even with richer specifications. He conceded he does not know how the respective potential markets will respond to the price parity.

By his estimate, the “neighbour's” edge comes from vertical integration and capacity built well ahead of the market, a roughly 30 per cent cost advantage that is "very difficult to copy for OEMs like us".

Trust is the harder task. Foreign buyers will ask who Indian makers are and how many vehicles they have sold, "the biggest point that we need to crack". India enjoys a "soft corner" as a software power but lacks the neighbour's manufacturing image, so "initially there will be a discount". However, the global buyers are wary of what is inside the cheaper cars from China, and India holds "better trust", he said.

Exports are also "one of the levers to offset" the tapering of production-linked incentives, Velusamy added.