India’s Mahindra to invest $1.2 bln in new EV plant

BANGALORE (Reuters) – Indian car maker Mahindra & Mahindra (MAHM.NS) on Monday invested 100 billion rupees ($1.21 billion) in electric cars near the western city of Pune. (EV) announced that it will build a manufacturing plant.

The Mumbai-based conglomerate said the investment, which has been approved by the Maharashtra government, would be spread over a period of seven to eight years.

Mahindra, known for its sport utility vehicles (SUVs) and Jeeps, will build its upcoming Born Electric Vehicles (BEV) range at the new plant, including an EV variant of its popular SUV, the XUV 700.

India’s automotive market is small relative to its population, with electric models accounting for just 1% of the roughly 3 million vehicles sold annually. However, the government wants to increase this to 30% by 2030.

The new plant will help Mahindra take on domestic rival Tata Motors, which dominates the Indian EV market with electric models of the Nexon SUV and Tigor hatchback. In August, Tata bought a former Ford Motor (FN) plant in the western state of Gujarat after the US automaker pulled out of the domestic market.

Tata’s EV division, in which private equity firm TPG (TPG.O) has invested, is valued at $9 billion.

Tech-to-tractors Mahindra Group has raised $250 million to $500 million for a new EV unit valued at $9 billion in July after its first round of funding from British International Investment (BII). We are negotiating with global investors to procure.

Mahindra’s first electric SUV is expected to go on sale in January. The automaker will deepen its ties with the Volkswagen Group in his August, with the German automaker to supply electrical components to its Indian peers.

Mahindra’s new plants include Volkswagen (VOWG_p.DE), Mercedes-Benz (MBGn.DE), Bajaj Auto (BAJA.NS) and Hero Motocorp (HROM .NS).

Reported by Nandan Mandayam, Bangalore. Editing by Rashmi Aich and David Evans

Our standards: Thomson Reuters Trust Principles.

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