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Auto-giant Mahindra & Mahindra (M&M) is looking to strengthen its electric vehicles (EVs) portfolio and the company will be exploring partnerships for sourcing more components from other companies. On Monday, M&M shares traded on a bullish note.
Anish Shah, chief executive and managing director of Mahindra told Reuters that the company had over time focussed on developing EV components in-house but now changed tack to forge partnerships to achieve faster growth in the segment.
Last week, Mahindra signed an agreement with Volkswagen to explore the use of MEB electric components for Mahindra’s new “Born Electric Platform". Both the companies will be evaluating the scope of collaboration.
In a statement, Mahindra announced its plan to equip its “Born Electric Platform" with MEB electric components such as electric motors, battery system components, and battery cells.
On the deal with the German motor vehicle manufacturer, Shah said that it's Volkswagen at this stage, and "as we see similar strengths in other areas, we are open to looking at various components that we would bring in, and do what we are very good at in-house as well."
Notably, Mahindra will face fierce competition from Tata Motors which currently dominates the electric vehicles market in the country. Last week, Tata raised about $1 billion from TPG for the business. Further, another player China's SAIC Motor-led MG Motor India is also looking to raise funds for developing its EV business.
Mahindra's chief said that they will use "significant funds" for EVs and have them available. He added, "We always will be open to value creation opportunities."
As India aims to meet its climate change and carbon reduction goals, Prime Minister Narendra Modi has announced companies billions of dollars as incentives to develop and strengthen their EV business.
It needs to be noted that, Mahindra has a developed EV portfolio in the commercial vehicles segment, but now the company aims to push EVs in the passenger cars segment and more particularly sports utility vehicles (SUVs).
Shah said, "Our strike zone has been authentic SUVs, that's where we are going to stay ... we are not going to make EV sedans, no hatchbacks."
At the World Economic Forum summit at Davos, Shah in an interview said that the "world is moving towards a lot more partnerships. It's better to source the best that's out there, rather than do everything ourselves."
On BSE, Mahindra shares are trading at ₹941 apiece up by ₹36.40 or 4.02% at around 3.13 pm. The shares are near the day's high of ₹943.40 apiece.
