Mahindra Electric to stick to Europe plans despite low UK sales
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Kolkata: The UK launch of the e2o electric car earlier this year has failed to live up to expectations, a key official at Mahindra Reva Electric Vehicles Ltd said. The number of cars sold so far is so small that the company’s chief executive officer-designate Mahesh Babu doesn’t even want to talk about it.
The UK voted in June to exit the European Union and with its currency depreciating by 20%, consumer confidence was shaken. But Mahindra Electric isn’t immediately taking a call on its future in the UK. “We expect more clarity to emerge in 3-6 months,” said Babu, who will take over as Mahindra Electric’s chief executive officer in December.
But consumers in the UK are happy with the car, and Mahindra Electric is now looking to enter other European markets such as the Netherlands. A left-hand drive variant of the e2o electric car is ready, and the company is now exploring opportunities in mainland Europe, Babu said in an interview.
There was nothing wrong with the vehicle launched in the UK, which is priced competitively against electric cars sold by global giants such as the Renault-Nissan alliance and Bayerische Motoren Werke AG (BMW), Babu said.
Though sales were disappointing, the e2o launch in the UK created an opportunity to “map consumer behaviour” in a developed market. For new markets, Mahindra Electric is now eyeing European nations which have announced that they will not allow registration of cars running on fossil fuels beyond 2030, he added.
In the UK, the people’s daily commute need was assessed at around 200km. But the e2o can only run up to 135km without charging, and was so positioned as a vehicle for commuting within London, and not from distant suburbs to the downtown, Babu said. Being an electric car, the e2o enjoys discounts on a congestion charge levied in London.
People across the world are beginning to appreciate that an electric vehicle is not only environmentally friendly, it is more affordable to keep. In India for instance, where Mahindra Electric—the lone maker of electric vehicles—has around 6,500 customers, there’s a clear shift in buying patterns, according to Babu.
Previously only people concerned about the environment would buy electric cars; now people are buying Mahindra Electric vehicles because of their low running cost. For its latest offering e2oPlus, which is currently being launched across India, Mahindra Electric claims its running cost is only 70 paise per km—it takes only about 10 unit (or kilowatt-hour) of power to charge the battery to run 110km.
According to a recently released report by consulting firm McKinsey and Co., 65% of new passenger vehicles sold will be hybrid or pure electric by 2030. However, in another report on Mahindra and Mahindra Ltd, JP Morgan India Pvt. Ltd said sales of electric vehicles in India are limited at this stage because of a paucity of charging infrastructure.
“There are still apprehensions about electric vehicles, which is not unusual,” said Babu, adding that it will take time for people to appreciate that electric vehicles are cheaper to maintain.
The e2oPlus is almost entirely made in India. Only two key components are imported: the battery and the motor control device. The latter has been designed by a US company, and the batteries are imported from China, Babu said.
Even the motor control device can at some point be produced in India, but batteries for a long time will have to be imported from China, where it is produced on a large scale, he added.