Mahindra Electric is set to witness robust demand for its electric vehicle (EV) product portfolio. The EV manufacturer has been in advanced talks with many stakeholders who wish to be part of the green mobility scenario. Recently, it revealed that its electric three- and four-wheelers will soon be supplied to around five cities in India for last-mile connectivity operations.
"In three or four cities, there is very serious talk about setting up a fleet of vehicles. We will also, hopefully, very soon announce the project with Uber following up the commitment made last year," said Pawan Goenka, MD, Mahindra, at the announcement in Mumbai. "It took much longer than what we thought because the policy didn't get announced and then there was this whole business of registration being free, which was supposed to happen but has not happened yet. That makes a huge difference between commercial viability. Now that we have gotten all that sorted out, we will probably announce our first pilot certainly within this month."
Goenka has revealed some information about the upcoming EV demand, saying that the company will be supplying around 40-50 units of its e-Treo three-wheeler and e-Verito sedan to this pilot project(s) each, which may later be ramped up to "any number".
Mahindra Electric has currently ramped up e-Verito sales to around 400-500 units including the EESL order; the electric carmaker says that it has seen huge demand for the green sedan from several fleet companies across India. The brand says that it has sold 15-20 e-Veritos each to several fleet operators in Delhi, of which "some will succeed, some will not". The one's that do succeed "will obviously buy more vehicles".
"There are some companies who are demanding up to 2,000-3,000 vehicles in the next three months," pointed out Dr Goenka. Apparently, there are fleet operators in Delhi-NCR who are betting big on operating a fleet of 3,000 to 4,000 e-Veritos in Delhi alone; the scenario is quite similar in other cities including Bangalore, Chennai, Hyderabad and Pune.
FAME II: THE NEXT STEP
Pawan Goenka is also optimistic about the announcement of the anticipated FAME II scheme. He says that it will "definitely be announced before March 31, 2019" and "will lay out a roadmap for EVs." He says, "If there is no change done to it [policy] and [it] is similar to what was to be announced on September 7, 2018, it would be a very good scheme for EVs."
The MD of Mahindra further acknowledged his support of the revision on import rules for EVs and their components, which he said is "quite prudent and is balanced between promoting Make in India and ensuring that EVs do come in to India. Because you can go overboard either side – if you put heavy duties you slow down EVs and if you put no duty, you discourage domestic manufacturing. It is a fine balance and very nicely done."
"The only concern that has come in which I hope will be corrected is imposing duty of five percent on EV battery cells (lithium-ion cells), which was duty-free up until now," he goes on to say. "The EV battery and battery cells were duty-free for importing in India for using in EVs. At present, they have put a duty on both cells and the battery. In a way, it is right to put duties on the batteries because many companies who are making them in India from cells, but these cells are not being manufactured in India. Therefore, it will have an adverse impact immediately on the price of the vehicle, as it is we are struggling to get the price right. And 5 percent on cells will mean a lot of money – for instance, the e-Verito will get costlier by around Rs 16,000-17,000 and that will not be good for the domestic market. We will write to the government; my take is that the government can put a sunset clause for making it duty-free for up until a particular period or when the battery cells are available in the country."
Referring to the demand for electric three-wheelers, Dr Goenka said, "The sky is the limit". He says the company is waiting for the FAME II scheme to be announced, which will have similar benefits as proposed (if not higher) for the three-wheeler category. Mahindra has at least half-a-dozen potential customers in talks with the company for ordering 2,000-3,000 electric three-wheelers each, bringing the potential total demand for EVs to around 10,000-12,000 units.
Mahindra is ramping up production for the e-Treo at its Bangalore plant on the back of huge demand. In January 2019, the company sold 143 units of the electric three-wheeler. The company has already been selling 800-1,000 units of e-Alfa Mini EV each month.
Considering the considerable demand for its EVs in hand, Mahindra is planning to ramp up production at its plant, which has a capacity to produce around 1,000 electric three-wheelers and 500-600 units of electric four-wheelers a month. However, its component-supplier capacity is yet to "be ramped up in that level" so as to meet the three-wheeler plant capacity. This will take another four-six months.