M&M’s JV with Ford may help its EV biz
MAHINDRA’S ELECTRIC VEHICLE BUSINESS POSTED CUMULATIVE LOSSES OF ABOUT ₹740 CRORE AS OF MARCH 31, 2019
MUMBAI: The recent partnership with Ford Motor Co. is likely to be a big shot in the arm for Mahindra & Mahindra Ltd (M&M) in turning around its electric vehicle (EV) business, where M&M was one of the first movers in India and where it has pumped in several hundred crores.
The partnership with Ford is likely to boost Mumbai-based M&M’s chances of succeeding in the EV space, because of the Detroit-based automaker’s scale and access to critical EV supply chain, said industry experts and people aware of the plans.
“Under the strategic alliance with Ford, M&M will jointly develop vehicles including electric cars for India and other emerging markets. That gives the two companies scale on the vehicle side. M&M can also tap into Ford’s developing global EV ecosystem for supply of critical EV parts,” said a person aware of the company’s plans on condition of anonymity.
“M&M had to invest in producing key parts for EVs as suppliers in India have largely stayed away from investing in building EV parts. That explains M&M’s large-scale investments in electric mobility,” he said.
This is expected to be a big boost for M&M, which has made investments of more than ₹1,500 crore in electric mobility so far and has reported cumulative losses of ₹740 crore as of March 31, 2019.
Data from the Society of Indian Automobile Manufacturers (Siam) shows that Mahindra Electric Mobility, the group’s EV business, reported factory dispatches of 850 units, 646 units, and 350 units in FY2017, FY2018 and FY2019 respectively. Earlier this year, the company discontinued its four-door e2O plus electric car because of meagre sales and passenger vehicle safety norms. Besides manufacturing EVs such as the e-Verito and Treo, the company also makes critical EV components such as e-motors, transmissions, power electronics and others in-house.
With its electric four-wheeler efforts having little success, M&M has been focusing on building its presence in the electric three-wheeler segment through its Treo models. Siam data reports wholesale dispatches of 1,341 units of electric threewheelers by Mahindra Electric in H1 FY20.
Ford, on its part, has chalked up ambitious plans on the electric vehicle front and plans to electrify more than 50% of its passenger vehicle sales by the end of 2022.
“Expect M&M to learn from Ford via technology transfer. Meanwhile, Ford, which has not invested in establishing any capabilities around electric mobility in India, would be able to retail locally-made electric cars in the future,” said a second person, also speaking on the condition of anonymity.