Mahindra to steer clear of CNG, focus on EVs

Mahindra & Mahindra (M&M) is consciously staying away from CNG (compressed natural gas)-powered vehicles as it looks to cash in on the popularity of its performance-focused sport utility vehicles (SUVs).

“Our brand today stands for performance and the thrill of driving. We don’t think we can deliver that with CNG. So we are not playing in the fleet segment or for customers who are looking to buy the most fuel-efficient car,” says Rajesh Jejurikar, executive director and CEO (Auto and Farm Sector), M&M.

Customers who buy Mahindra SUVs do it for "performance" and not for cheaper fuel options, says Jejurikar. “There is a segment of customers who want CNG, there is a segment of customers who want to buy micro SUVs but we are not having them. We have consciously said that we will play to our strengths,” he says.

CNG-powered cars are less powerful than petrol or diesel cars but produce fewer tail-pipe emissions. Of late, CNG car sales have seen a boom as customers in both urban and rural areas are attracted to their lower running costs.

Mahindra & Mahindra on Tuesday launched two new “born-electric” cars, the BE 6e and the XEV 9e, at prices starting from ₹18.9 lakh (ex-showroom) and ₹21.9 lakh, respectively. The automaker is expected to begin deliveries of these SUVs by the end of February or early March next year. M&M is setting up a production capacity of 90,000 units annually for its new EVs. It has allocated ₹4,500 crore to develop these two battery electric vehicles. This investment includes the development of the new INGLO platform, powertrain, software and technology.

To ramp up its electric vehicle portfolio, M&M plans to invest ₹12,000 crore on EVs in three years till 2026-27. It expects electric SUVs to account for at least 20-30% of total sales by that time.

On the newly launched BE 6e and XEV 9e, Jejurikar says these EVs belong to two different segments, which offer a substantial market size. The carmaker is eyeing the top 50 cities in the country to sell these vehicles. “BE 6e will open up a new customer base, including those who haven’t yet considered Mahindra,” says Jejurikar.

When asked if M&M plans to introduce new EVs with smaller battery packs to make them affordable to a wider section of people, Jejurikar says the company may offer these EVs with smaller battery packs over a period of time but there are no immediate plans.

Unlike India’s largest EV maker Tata Motors, Mahindra is not looking at setting up separate showrooms for EVs. “Our view is to give customers choices. Let customers choose what they want. This is why we are taking a conscious decision to sell these vehicles along with ICE in the same dealership. When you come into showrooms, you pick what you want. If we get too worked up about cannibalisation, we end up not doing the right thing.  Let customers make the choices,” says Jejurikar.

On hybrid vehicles, Jejurikar says the difference in emissions of hybrid and regular ICE vehicles is not significant enough to make a material difference in terms of climate impact. “We believe the destination technology of the country has to be electric,” he says.