MG Motor looks to win over EV skeptics with new EV plan. Hint: You can buy your EV & battery separately

New Delhi: JSW-MG Motor India is looking to win over hesitant electric vehicle (EV) buyers with a financing plan that tackles concerns about battery life, resale value, and pricing—issues that are deterring potential buyers from making the shift from internal combustion engine (ICE) vehicles.

MG has rolled out a battery-as-a-service (BaaS) model for its Windsor EV, which was launched on Wednesday as the first product from the JSW-MG joint venture since it was formalized in March.

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This allows customers to pay only for the car's ‘shell’ upfront while opting to pay for the battery—essentially the heart of an EV—on a per-km basis ( ₹3.5 per km according to one of the battery rental schemes MG has announced).

While this isn't entirely new in India—Mahindra’s Reva introduced a similar battery leasing option back in 2010—the Windsor is the only passenger vehicle to be offered with this solution at present.

MG Motor is also evaluating the potential for adopting the BaaS model across its other EVs.

Financially accessible

MG Motor's new BaaS model could make EV ownership financially accessible. For a ₹9 lakh ICE car, the monthly expenditure—including fuel and servicing—averages around ₹38,000, Parth Jindal, director, JSW MG Motor India said on Wednesday.

“In comparison, the ₹9.99 lakh Windsor EV, with its battery-as-a-service plan, would cost approximately ₹29,500 in EMI and ₹6,750 in running costs, totalling about ₹36,250 per month. This EV, which is much bigger, much wider, and has many more features, is equivalent to, for the end customer, a ₹9 lakh ICE car,” he said.

Industry experts are sceptical about the potential acceptance of a BaaS model for passenger vehicles and said it will need more time to emerge as a fully-evolved model.

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“With battery prices having dropped considerably to roughly $100/kwh, one is rapidly approaching price parity with ICE vehicles. OEMs are passing these benefits on to consumers. With price becoming less of a factor, does it really warrant a battery subscription model?” Ashish Malik, an independent business strategy consultant and EV industry expert, said.

“Also, Indian consumers have an all-inclusive mindset. They are wary of recurring add-on charges as has been seen in the case of value-added softwares in their vehicles. Battery subscription has failed in the past due to lack of clarity with respect to ownership of the battery at the end of the subscription period. What happens to the resale value of the vehicle without its heart? Most people also tend to sell their vehicles directly in the second sale market as they get higher resale values rather than when they sell through OEM dealers,” he told Mint.

Investing in training

Meanwhile, to ensure customers understand the new model, MG Motor said it will invest in extensive training for its employees and dealers.

The Windsor EV will come with a lifetime warranty on the battery for customers and a 60% assured buyback value after three years for those who buy a three-year maintenance plan with the car, a first for any passenger EV on the market at present.

MG Motor said it saw its EV sales grow 52% in the first seven months of the year. The company aims to surpass 50% of its sales coming from EVs with the introduction of the Windsor EV.

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“We want EVs everywhere in this country...The only way of doing that is by doing this kind of innovation,” Jindal said. “We need to play a leadership role, because others have other agendas. They have big engine factories... We are a clean, new company, five-year-old company. We have to be aggressive, and we have to bring these concepts”.

The company is targeting 80% localization, including battery assembly, with JSW considering entering cell manufacturing. “We are assembling the battery already, and as far as cell manufacturing is concerned, JSW has plans to get into cell manufacturing,” Rajeev Chaba, president and managing director of MG Motor India, told reporters.