Mahindra and Mahindra Ltd, an Indian manufacturer, announced on Wednesday that it would invest 100 billion rupees ($1.21 billion) in the establishment of an electric vehicle (EV) production factory near the western city of Pune. The Mumbai-based conglomerate stated that the investment, which has been approved by the Maharashtra state government, would be distributed over a 7-8 year period.
The new facility will produce Mahindra’s future Born Electric Vehicles (BEVs) series, which includes the EV form of its iconic SUV, the XUV 700. Mahindra is best known for its SUVs and jeeps.
India’s automotive market is small in comparison to its population, and electric vehicles account for about 1% of total yearly car sales of around 3 million. But the government hopes to expand this to 30% by 2030.
The new facility will assist Mahindra in competing with domestic rival Tata Motors, which now dominates India’s EV market with electric versions of its Nexon SUV and Tigor hatchback. Tata purchased a former Ford Motor facility in the western state of Gujarat in August after the American manufacturer departed the domestic market. Tata’s EV unit is valued at $9 billion, with private equity company TPG investing.
The Mahindra Group is in talks with worldwide investors to raise between $250 million and $500 million for its new EV company, which was also valued at $9 billion in July after receiving its initial investment from British International Investment (BII).
Mahindra’s first electric SUV is set to hit the market in January. The manufacturer strengthened its connections with Volkswagen Group in August, with the German automaker supplying electric components to its Indian counterpart. Mahindra’s new facility will be located in one of India’s oldest car manufacturing hubs, which is also home to Volkswagen, Mercedes-Benz, Bajaj Auto, and Hero MotoCorp.
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