The order for the second phase will be issued after the completion of deliveries of 500 EVs in the first phase by November 30.
M&M had earlier said that it would have to take a "hard look" whether it would be justifiable to participate in the second phase of the tender as it was finding it difficult to match the per unit price being offered by Tata Motors.
Tata Motors had quoted the lowest price of Rs 10.16 lakh exclusive of GST for the tender. Later, Mahindra also decided to participate in the tender.
The EVs procured under the tender will be used to replace petrol and diesel cars being used by the central government and its agencies over a 3 to 4-year period.
Goenka said the company is looking to ramp up the EV production to 5,000 units by the end of 2019.
"Currently, we have 4,000 EVs on Indian roads which amounts to around 50 million kms of drive," he added.
Goenka said the company is making progress in the long term contracts in assembling batteries, manufacturing of motors and power electronics.
"We have invested Rs 500 crore in EV technology till date. Another Rs 600 crore will be invested over the next 2-3 years," Goenka said.