Rajesh Jejurikar, ED and CEO, Automotive and Farm Business at Mahindra & Mahindra says the Indian market has “very functional EVs,” and not products that can, “wow the customers,” and the company is banking on its Born EVs to build excitement with its future EVs and building penetration.
M&M has lined up close to five EVs between now and 2026, which are based on its ground-up electric vehicle architecture, designed to “wow,” the customers, claims the company.
“I think today’s electric offerings are very functional, including our offering in the market. They’re not products that will wow the customer. We do believe with wow products, that’s the right path,” said Jejurikar to analysts post Q4 earnings announcement.
The electric vehicle penetration has started witnessing a challenge globally, and even in India, month on month sales have started declining.
In FY24, approximately 99,000 electric vehicles were sold with a penetration of about 2.3% versus 88,000 hybrid vehicles accounting for 2% of the overall market.
There has been a surge in interest in hybrid vehicles including India. There was also buzz about a potential correction on taxes for hybrid vehicles in India.
Jejurikar says It has been confirmed that the Finance Minister said there is no GST reduction planned for hybrids and it is not surprising, as the constant imperative from the government has been to “drive EV penetration.”
He explained that a lot of people tend to compare India with the rest of the world and that is not “the right thing to do,” as the penetration in India is only at 2% and some of the global markets are reaching a saturation level at “15%, 20%, 25%.”
He expressed confidence that the charging infrastructure will come up and that backed by Wow products, the penetration for electric vehicles will rise.
Drawing a parallel to the Thar – on how “wow products,” do well in the market regardless of demand environment. Jejurikar reminded analysts that the brand hit a new peak last month, after being in the marketplace for 3-4 years.
“What the EV market needs in India is a real wow product. People buy wow products. I mean, there’s no rational reason to buy a Thar. It’s just a very emotional wow purchase. We do believe that when you have the right proposition, people are going to buy it. And that’s what we think will happen with a born electric,” elaborated Jejurikar.
“Electric has the benefit of a wow drive experience. I mean, it’s just an amazing driving experience apart from the quietness, the acceleration, all of that. It’s a totally different experience and as customers experience that, I’m sure they’ll move to the right products,” he added.
Committed to EVs, but open to hybrids
M&M is staying committed on its electric path, and the top management is not ruling out hybrids.
“For us, hybrid is an option. Just as diesel was to gasoline, – a more fuel-efficient alternative, and when diesel prices were lower than gasoline, customers who had to run a lot of their vehicle every day preferred to buy a diesel vehicle. The same thing is going to happen with hybrids today,” said Jejurikar.
The head of automotive and farm business explained that M&M’s portfolio is “very different,” than what it had five years ago.
“Five, seven years back, customers bought a Mahindra because they wanted fuel efficiency. Today, that’s amongst the least important buying reasons amongst our portfolio of customers. So, we don’t see hybrid wanting customers actively cannibalise us, except in some very few segments. At an appropriate time, depending on how the category is moving, we will look at hybrids wherever needed,” he assured.
