Mumbai: Mahindra and Mahindra Ltd on Saturday won an order to supply 1,000 electric vehicles (EVs) to Bengaluru-based fleet operator Baghirathi Travel Solutions Pvt. Ltd through its subsidiary Mahindra Electric Mobility Ltd, Mahesh Babu, CEO of Mahindra Electric said, describing the order as “one of the biggest in Indian corporate mobility".
The order value exceeds Rs100 crore and is Mahindra’s largest EV order so far, eclipsing the Rs16 crore the company stands to earn revenues from the first phase of the central government tender floated through state-owned Energy Efficiency Services Ltd (EESL) in September. The second phase has not been announced yet.
Founded in 2003, Baghirathi owns and operates a fleet of 2,000 vehicles in Bengaluru, primarily catering to companies, in addition to schools and inter-city demand.
As India’s only commercial EV manufacturer, Mahindra has espoused the deployment of EVs with fleet owners, taxi aggregators and car rental companies because their business models necessitate running longer distances per day, which enhances the commercial viability of an EV. So far, the maker of the Scorpio has sold its EVs to Bengaluru-based electric cab company Lithium Urban Technologies Pvt. Ltd, car rental company Zoomcar and cab aggregators Uber Technologies Inc. and Ola (ANI Technologies Pvt. Ltd), in addition to starting a pilot project with Baghirathi in June 2017.
The model to be supplied is the electric sedan e-Verito, with its range extended by close to 30% up to 140km, said Mahesh Babu, chief executive at Mahindra Electric. The range is the distance an EV can run on a single charge. Deliveries to Baghirathi will begin in batches of 100 units per month from mid-February.
The range of the e-Verito supplied to EESL was lower at 110km, therefore a premium has been charged on the upgraded model, Babu said on the question of pricing, without disclosing further details.
Mahindra did not make any money at the price point of Rs10.6 lakh quoted in the EESL order, said Mahindra and Mahindra managing director Pawan Goenka in early October. Therefore, a back-of-the-envelope calculation would make the Baghirathi order more profitable for Mahindra.
Analysts expect greater uptake of EVs by fleet owners owing to a relative ease in operation as compared to private owners.
“As commercial players deal with larger EV volume, they can develop their own charging stations. Therefore, easier and more commercially viable operations would increase uptake. At this point, the public sector is also aiding the development of charging infrastructure", said Abdul Majeed, partner at consulting firm PwC India.
A case in point, Baghirathi itself desires to replace its entire fleet with EVs in the next three to five years as charging infrastructure allows, beginning with a 20% conversion in fiscal 2019, said Mahesh Hariharan, managing director at Baghirathi.
However, it remains to be seen whether an underdeveloped charging station network will play spoilsport to greater EV adoption. “The biggest operational challenge during the 10 months of the pilot project was the charging infrastructure," said Hariharan.
At present, 15 charging points are being placed at “strategic locations" to cater to the first batch of EVs, said Hariharan, without disclosing the entity setting up the infrastructure, while adding that “the Karnataka government is looking into it and working out the modalities".