To source electric vehicle components such as batteries and motors, Mahindra on Thursday raised $250 million from British International Investment for the unit
After Mahindra & Mahindra raised funds for its new electric vehicle (EV) unit at a $9.1 billion valuation, its CEO said that the company could consider investing in a battery-cell company to meet future electrification needs.
To source electric vehicle components such as batteries and motors, Mahindra on Thursday raised $250 million from British International Investment for the unit and is exploring a partnership with Volkswagen AG.
While the Volkswagen deal would meet Mahindra’s “short to medium term” battery needs, Mahindra CEO Anish Shah said the company was open to looking at some sort of “investment with a global leader” in the battery-cell space if it needed to secure future supplies.
“Our intent is not to get into (manufacturing) batteries,” Shah said in an interview. “There are people who do it very well. We can partner with them; we could be a co-investor in some form. We don’t need to own it and run it.”
Five electric sport-utility vehicles (SUVs) are in plans to be launched by Mahindra over the next few years. Of its total annual SUV sales, these models are expected to contribute up to 30 per cent or about 200,000 units by March 2027.
Growing demand for electric vehicles and disruption of supply chains across the globe are pushing automakers to look at ways of having greater control over supplies and costs. Some carmakers are spending billions of dollars on mines and factories for motors and batteries – a departure from years of relying solely on suppliers.
Automakers are also wary of situations like the pandemic semiconductor shortage that lead to production stoppages. Many companies still face order backlogs because of supply problems.
Shah said that, except for batteries and motors, most of components for electric vehicles were not very different from those of combustion-engine cars and Mahindra produced a majority of those parts in-house.
“If we can get an agreement like we have with Volkswagen to secure (battery) supplies, that’s what we will do. If there’s some investment we need to make to secure those supplies, we will do that,” he said.
As part of a policy to meet national climate change and carbon reduction goals, Mahindra’s plans come as Indian companies seek to capitalise on billions of dollars’ worth of incentives being offered by the government to build electric vehicles.
India’s electric vehicle market, dominated by local carmaker Tata Motors, represents only one per cent of the country’s annual sales of about three million vehicles. The government wants this to grow to 30 per cent by 2030.
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