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Mahindra & Mahindra Ltd (M&M) has strengthened its presence in the electric vehicle (EV) industry by partnering Volkswagen. It plans to use Volkswagen's MEB (modular electric drive matrix) electric components such as electric motors, battery system components and battery cells for its new Born Electric Platform.
Volkswagen’s MEB electric platform is currently being used by its group brands - Audi, Skoda, SEAT/CUPRA. As of now, it provides the technology base for ten electric models from five brands. It is designed as an open vehicle platform which aids automakers to build EVs in a cost-efficient manner. The platform caters to a variety of segments and vehicle types ranging from compact vehicles to vans to SUVs (sports utility vehicles).
“The use of MEB components will give M&M access to fast evolving global technologies. This will ensure that M&M has access to the latest technologies and should also help reduce the development time and cost to launch its own Born Electric vehicles," said analysts at Nomura Financial Advisory and Securities (India) Pvt. Ltd in a report on 19 May.
“MEB’s economies of scale may help bring down costs, particularly for batteries. We believe M&M may work out a localisation plan for the parts it intends to use to take advantage of Indian costs, else we see a risk of higher import content than peers," they added.
M&M’s Born Electric vision would be unveiled in July and Born EVs are likely to be launched starting 2025. Prior to that, it plans to launch e-XUV400 by the last quarter of the financial year 2023.
Against this backdrop, the management’s commentary on its future strategy for EV demands attention. It is expected to announce its March quarter (Q4FY22) results on 28 May, and cost pressures on margins would be a key monitorable.
Meanwhile, shares of M&M have risen 8% so far in calendar year 2022, while the Nifty Auto index has been flat.
