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Mahindra & Mahindra (M&M) today said it is yet to take a call on taking part in the second phase of tender bidding for supplying 9,500 electric vehicles (EVs) to the state-run Energy Efficiency Services Ltd (EESL), saying it would lose money with the present cost structure.
The orders for supply of 9,500 electric cars in the second phase will be issued after the completion of deliveries of 500 EVs in the first phase.
Mahindra & Mahindra will supply 30 per cent of the 500 cars in the first phase of the tender as it is finding it difficult to match the price being offered per unit by Tata Motors.
The utility vehicle major said it will have to take a "hard look" at how it could justify participating in the next phase of the tender.
In the first phase, Tata Motors would supply 250 cars while M&M would pitch in with 150 units of e-Verito.
"We were offered 50 per cent of the tender (500 units) in the first phase but we opted for 30 per cent as we would be losing money as our product is about Rs 2.3 lakh expensive than other bidder (Tata Motors)," M&M Managing Director Pawan Goenka said in a conference call.
He said the company would have to look at the costing part before bidding in the second phase.
"We have been selling electric vehicles in the country for the the last five years. We have an idea about the costing of various components. So we find it difficult to comprehend the pricing offered by the other bidder (Tata Motors). So we will have to take a hard look as whether it would be justifiable to participate in the second phase," Goenka said.
Tata Motors had emerged as the lowest bidder for 10,000 electric cars auction conducted by the EESL. The company had quoted the lowest price of Rs 10.16 lakh exclusive of GST.
Tata Motors will provide electric cars for Rs 11.2 lakh, which will be inclusive of GST and comprehensive five-year warranty which is 25 per cent below the current retail price of a similar e-car with three-year warranty.
The vehicles will be be supplied with eight-week of issue of letter of award for phase I (by November 30 2017).
Goenka sounded confident of supplying cars to EESL in the stipulated period.
He added that e-Verito is bigger in size with better features and it will seek suppliers' views to ascertain if the price can be brought down.
Goenka, however, said the company would not curtail vehicle size and other features to bring down the cost.
He also lauded the EESL initiative and said the development would go a long way in promoting electric cars in the country.
The electric vehicles procured under the current tender will be used to replace petrol and diesel cars currently used by the central government and its agencies over a 3 to 4-year period.
Replying to a query, he added that the company is also working on electric buses and is also interested in participating in the tenders for electric three wheelers.
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