Mahindra Electric expects to reach full capacity of 5,000 units by 2018

CEO Mahesh Babu said the company is working with aggregators, e-commerce firms to sell its products

Mahindra Electric, part of $17.8 billion Mahindra Group, is expecting its manufacturing plant in Karnataka to reach its capacity of 5,000 units by next year. The development comes on the backdrop of the company launching four new products last year.

Speaking on the sidelines of new electric city smart car e2oPlus launch in Chennai, Mahesh Babu, chief executive officer, Mahindra Electric said that the company had a capacity of 2,000 units last year and increased the capacity to 5,000 units a year recently.

"We are expecting that we will reach the capacity in this year," said Babu, who declined to share any future investment details for additional capacity stating that it is in the discussion stage.

The company has now offerings in personal segment, passenger segment and goods movement, and started developing vehicles for personal aspirational segment, where BMW and Tesla brands have a presence in.

While declining to give any time frame and investments, he said, to develop any new product it will take at least three years.

Currently, Mahindra Electric catering to segments including compact, sedan, LCVs (including load and passenger).

Dharmendra Mishra, vice president & head sales, marketing & customer care, Mahindra Electric added that today the major hindrance is vehicle cost and availability of charging point.

Battery cost, which was the major chunk of a vehicle, came down to nearly $300 from $1,000 in the last 3-5 years and in next five years, it will be more economical. While the initial cost may be high, if state governments (along with Centre's FAME) incentives are added the vehicle cost can be compared to any other automatic vehicles.

As far as charging infrastructure concerned, he added, the company is creating the eco-system by setting up battery charging infrastructure in malls, IT parks, Mahindra networks and in other areas.

Babu said the company is now working with aggregators and e-commerce firms to sell its products.

A Bengaluru-based firm has already taken 150 cars from Mahindra Electric and similarly, e-commerce firms like BigBasket have also taken vehicles from Mahindra Electric and now it is trying to sell products to Amazon, Flipkart and others firms.

BigBasket, on a pilot basis, uses 50 cargo electric vans of Mahindra Electric and the company expects to take this to others parts of the country.

Mishra added, the firm which bought 150 cars already achieved a break-even since its running cost is lower at 70 paise per km in EV as against Rs 5-6 in diesel of gasoline. Besides, the routes are predictable so developing infrastructure and access for the same will be easy.

He said that the Mahindra Electric cars are positioned as 'City Cars' and they will continue to be positioned till the infrastructure gets created across the country.

The company has sold around 7,000 cars in India since it acquired Reva in 2010.