In a big 'leap of faith', Mahindra and Mahindra to invest Rs 900-crore more into EVs

"We have already invested Rs 600 crore in EVs over the past five-six years and have announced decided to invest Rs 400 crore in Karnataka and Rs 500 crore in Maharashtra over the next four-five years. This will be used for capacity, technology and products," managing director Pawan Goenka told reporters here.

"We are not waiting for any policy to move forward. To be a pioneer, you have to create the road and we have to move forward," he said on the side-lines of the ongoing Maharashtra investor summit. Goenka, however, said there is a need for the prevailing subsidies on EVs to continue for longer to ensure growth of this industry. Once it touches a critical mass of say 2 lakh units a month, which he expects by 2022, it will be on an equal footing with the conventional internal combustion engine-based vehicles, he said.

At present, Mahindra has a capacity of 400 units a month, which will go up to 1,500, including three-wheelers by this September, he said, adding by next December they should be capable of rolling out 4,000 units.

The current investment plan aims to take the capacity to 5,000 units a month and is based on certain assumptions like the subsidies continuing, Goenka said.

He said the company will be doing all parts of the EV play, except batteries, which require greater volumes for local manufacturing and so they will have to be imported.

Goenka said at the current demand for EVs is so low at under 300 units a month, but said he is confident of better days and that the additional investments as "leap of faith".

In what has been termed as a volte-face by government, Union roads minister Nitin Gadkari had last week said there was no need for a separate policy on EVs. The minister had earlier said that such a move was in the works.

Following this an industry lobby is reportedly meeting Union heavy industries minister Anant Geete and Niti Aayog chief executive Amitabh Kant.

Goenka, however, said there has not been any "u-turn" by government, as there are already beneficial moves like differentiated GST treatment and EV policies by states like Maharashtra which is "enough to get the industry going".

He was, however, not so supportive of government's earlier plan of turning 100 per cent electric by 2030, terming it is "too ambitious" and said there is a need to "walk more, before we start running".

The auto industry veteran said we should be satisfied even if we achieve 30 per cent EV share by 2030, and enlisted global adoption experiences to buttress his point.

EVs contribute for only 0.04 per cent of the domestic car market now compared to 2 per cent in China and 32 per cent in Norway, he said, adding both these countries had invested massively over the past decade to achieve these numbers.

Pointing out that lack of charging stations is the biggest impediment for EV-makers and said we should be first focusing on the metros having troubles around pollution before taking it nationally.

Transport aggregators, including bus transport utilities, radio taxi operators like Uber and Ola, will be the first ones to adopt EVs, Goenka said.

He, however, termed the EV space as a big opportunity and asked everybody to focus on it because of the advantages of zero pollution and zero fuel imports.

He also sought to placate the concerns of auto ancillaries, saying the industry will continue to grow at 4-5 per cent even in the decade to the 2030s which will give such companies sufficient business.

Meanwhile, addressing the summit, Tata Power executive director Ashish Khanna said technology has not changed so much on the solar front, which may justify "grid parity" that is seen in new bidding at rates as low as Rs 2.45 per unit.