MG Motor super charges electric vehicle biz, weighs funding options

MG outlined an investment of Rs2000 crore for FY22 and FY23 and is currently weighing various options to raise more funds as it seeks to charge up the EV business.

MG Motor India envisages a fourth of its total sales coming from electric vehicles (EVs) by the end of FY23 as the company gears up to launch a mass market EV priced at Rs10-15 lakh.

MG Motor India envisages a fourth of its total sales coming from electric vehicles (EVs) by the end of 2022-23 (FY23) as the company gears up to launch a mass-market EV priced at Rs 10-15 lakh.

In terms of percentage contribution to total sales, this will be the highest for any manufacturer in India, claims Rajeev Chaba, president and managing director, MG Motor India.

“Continuing the EV story, we are launching another EV in the Rs 10-15 lakh range in the first quarter of next year.  The two put together, we should be able to sell 30,000 EVs next year. This will make us the No. 1 manufacturer in terms of percentage of sales,” Chaba told Business Standard.

Presently, Tata Motors is the largest EV maker among passenger vehicle makers. In February, battery-operated cars and sport utility vehicles accounted for 7 per cent of its sales. The Tata group flagship has a stated objective of EVs contributing 25 per cent in its total sales in the medium to long term.

MG outlined an investment of Rs 2,000 crore for 2021-22 and FY23 and is currently weighing up various options to raise more funds as it seeks to charge up the EV business.

Owned by SAIC Motor Corporation, the company may try to sell 10-30 per cent stake and is toying with options, including issuing new shares or diluting SAIC’s holding, Reuters reported last week, citing sources familiar with the plans.

It may even create a separate unit for its EV business in India. It’s also talking to private equity funds that are increasingly interested in investing in the fast-growing EV market, it said.

“All options are open,” said Chaba, alluding to the fund-raising plans. He declined to comment further.

On Monday, MG launched the face-lift, improved version of the ZS EV.  Claiming to be powered with the largest in-segment 50.3 kilowatt hour battery offering a 461-kilometre certified range in a single charge. To be available in two variants, it’s priced at Rs 21.99 lakh and Rs 25.88 lakh respectively.

Fuelled by central and state government incentives, EVs have been on a roll. “Over the past five financial years, subsidies have accelerated EV sales rapidly (more than 20 per cent year-on-year growth in most segments) on a low base of 2016-17 and pandemic notwithstanding, according to CRISIL Research.

On the back of new launches and a strong order book of existing models, the British brand is looking to treble its annual sales to 120,000 by the end of FY23, said Chaba. It will commence a third shift at its plant by the first quarter of FY23. MG will firm up plans for another unit by the end of this year, he said.  

“We are very optimistic about the EV market,” said Chaba, adding, “Consumers are looking for options. The ZS EV is booked for the year.”  

There’s no issue on the demand side, it’s the supplies that remain a concern, he said, referring to the availability of semiconductors. The demand-supply gap remains and is likely to continue through the year, he added.