Move follows govt’s decision to boost local manufacturing under FAME-II
Mahindra is gearing up to supply electric powertrains to SsangYong Motor by early 2020
To develop its Bengaluru facility into a hub for manufacturing electric vehicles, Mahindra Electric Mobility Ltd (MEM), a unit of Mahindra and Mahindra Ltd (M&M), is in talks with global manufacturers to sell its locally made components such as electric powertrains.
In 2018-19, M&M had announced investments of ₹1,000 crore in Karnataka to develop an electric vehicle manufacturing facility.
M&M’s move follows the Union government’s decision to promote domestic manufacturing of electric vehicles and related components under the second phase of the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) scheme.
According to Mahesh Babu, chief executive, MEM, the company is in talks with some of its global partners. “Mahindra is investing in aggregates like electric motor, battery pack, motor transmission and power dynamics required for developing an electric vehicle. Since the industry is in a very nascent stage, Mahindra will supply these parts to other manufacturers as well. We are now gearing up to supply electric powertrains to SsangYong Motor Co. The supply will start by early 2020," added Babu.
At present, Mahindra Electric is the only automobile manufacturing company to offer electric three- and four-wheeler products to fleet aggregators.
The centre also wants companies to gradually develop manufacturing capacities for electric vehicles to avail the subsidies under the Fame-II scheme.
“We cannot use government money to subsidize imports. We want to make India a manufacturing hub and ₹10,000 crore has been sanctioned by the government for this purpose. We want to promote electric two- and three-wheelers and the cities (state transport units) should also make use of the subsidies to use electric buses and clean the environment," said Amitabh Kant, chief executive, NITI Aayog, on the sidelines of a press briefing by MEM and Blu Smart Mobility.
To kick-start the centre’s plan to use electric vehicles in public transport, Mahindra is collaborating with fleet aggregator Blu Smart Mobility. According to the plan, 1,500 electric vehicles made by MEM will be available on Blu Smart’s platform by next year.
Mahindra has already announced its collaboration with South Korean lithium-ion battery manufacturer LG Chem Ltd, which will help the company make the batteries locally.
“LG Chem will supply us the cells and, with their collaboration, we will set up a manufacturing facility for converting the cells to modules, and then to battery packs. The plant will be set up in Chakan, Pune and Mahindra will own the IPR (intellectual property rights)," added Babu.
“If, you don’t do this module and packing now, then 100% of the value comes from abroad, but when your import cells it is close to 65-70%. The remaining 30-35% will be local value add and that will help save cost," he added.