Mahindra Electric banks on Uber, Ola, Zoomcar for its future growth

Facing stagnancy in passenger car sales of electric vehicles, Mahindra Electric is focussing on sales to fleet operators like Uber, Ola, Zoomcar and others, to drive growth in this segment.

Mahesh Babu, the company's CEO said that in the last fiscal year, the company was able to sell more than 4,000 vehicles, of which passenger cars accounted for around 1,300 units. It accounted for around 0.5 per cent of the entire sales volume of Mahindra & Mahindra in the last fiscal year. 

While this year, riding on optimism over adoption of electric vehicles in many Indian states and formulation of favourable state government incentives, he expects sales volume to double. 

However, the growth will be led by commercial vehicles and sales to fleet operators. 

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“The passenger car sales have been stagnant while sales of commercial vehicles have more than doubled and institutional sales have been good. Now, we will be focusing on sales to fleet operators which is expected to drive growth”, he said.

Since the acquisition of Reva Electric Car Company from the Maini family in 2010, which marked its entry into the electric cars segment, Mahindra Electric has been able to sell 4,500 cars which are currently plying on the roads and has lined up Rs 6 billion investment to develop its electric car portfolio. 

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A significant portion of Babu’s optimism arises out of its recent partnership with Zoomcar, which has targeted to build a significant fleet of electric cars.

Greg Moran, CEO at Zoomcar said that this company, which offers self-driven car rentals sourced from individual owners, has targeted a fleet size of 15,000-20,000 electric vehicles by 2020.

“Currently, electric vehicles account for less than 10 per cent of the total fleet size but next year, it will scale up to account for 25 per cent of the total fleet. By 2020, we plan to increase the contribution of electric vehicles to our fleet to 50 per cent”, Moran said. 

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Zoomcar’s current fleet size is 4,000 cars which, Moran plans to increase to 30,000-40,000 by 2020.

Recently, this car rental platform provider has entered into an agreement with Mahindra Electric for procurement of electric vehicles. Such cars, which can be bought by individuals to rent it under the Zoomcar platform, can obtain customised financing by Mahindra Finance – another Mahindra Group company. 

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“The tie-up with Zoomcar is significant and is crucial to drive future growth of the company”, Babu said. 

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The biggest disadvantage of electric vehicles is the limitation of charging stations and points and the run-time of cars on a single charge which is slowing down its adoption. Typically meant for intra-city commutation, e2oPlus, Mahindra Electric’s flagship model can cover a 100-km distance on a single charge.