In order to speed up the development of electric vehicles (EV), Mahindra & Mahindra is changing tack and is open to sourcing more EV components from suppliers, while the company expects more competitors to eat into its dominating market share in the electric three-wheeler market.
Anish Shah, CEO of Mahindra & Mahindra, told Reuters at the World Economic Forum in Davos that they had focused on developing EV components in-house, but the world is moving toward partnerships, and it is better to source the best that is out there.
Mint reported that Mahindra & Mahindra has partnered with Volkswagen and will introduce EV components such as electric motors, battery system components, and battery cells from Volkswagen's MEB platform and use them in Mahindra & Mahindra's Born Electric platform.
According to Mint, Nomura Financial Advisory and Securities said that adopting MEB components will give Mahindra & Mahindra access to fast-evolving and latest global technologies, thereby reducing the time to develop and launch EVs. At the same time, MEB's economies of scale may help bring down costs, particularly for batteries.
Mahindra & Mahindra has developed EVs for commercial use and ventured into passenger vehicles by launching SUVs. Still, Shah told Reuters that they had no plans to make other electric passenger vehicles, such as sedans or hatchbacks. Shah also told Bloomberg that he expects Mahindra & Mahindra to launch world-class EVs in 2-3 years.
As for the Indian electric three-wheeler market, where Mahindra & Mahindra has a 70% market share, Shah told Bloomberg that the market is about to take off, but its market share may decline due to more and more competitors launching products.
According to Bloomberg, Shah said that the global chip shortage still impacts Mahindra & Mahindra's production, and lockdowns in China and the supply chain disruptions caused by the Russian-Ukrainian war may bring more challenges.
Mahindra & Mahindra is one of the companies eligible for the Production Linked Incentive scheme for electric and fuel-cell vehicles and advanced automobile components the Indian government announced in March.
With a market share of 7.53%, Mahindra & Mahindra ranked fourth in the Indian automobile market in 2021, but the company has less than a 1% market share in the Indian EV market.