M&M in talks with Kerala govt to set up electric vehicle manufacturing unit

Earlier in the day, M&M issued a clarification, calling the reports on its Gujarat plans untrue

Mahindra and Mahindra (M&M), India’s fourth-largest automaker, is in discussions with the Kerala government to set up an electric vehicle (EV) manufacturing unit in the southern state, which is known for its higher EV penetration.

If the talks succeed, it could boost the state’s industrial sector ahead of its Global Investment Meet (GIM) in February scheduled next year.

“Some companies from outside the country are coming to Kerala because it is the largest EV market. Mahindra is coming for some discussions next week,” Kerala Industries Minister P Rajeeve told Business Standard. An M&M official declined to comment on the company’s plans for Kerala.

Kerala leads the country in passenger vehicle EV penetration at 5.2 per cent, ahead of Delhi’s 3.2 per cent and Karnataka’s 3.1 per cent, according to a BNP Paribas report. The state also has the highest penetration of electric two-wheelers at 13.5 per cent, ahead of Karnataka with 11.5 per cent, Maharashtra with 10.1 per cent, and Delhi with 9.4 per cent.

Kerala has the advantage of having a container port like Vizhinjam. “As far as EV sector sales are concerned, Kerala is number one. We have already created an ecosystem for charging. Now, we have a state-owned firm that has produced an electric auto in the country called Kerala Automobiles. We are also in discussions with some companies to start manufacturing units,” Rajeeve said.

 

On Friday, a Reuters report suggested that M&M and China’s Shaanxi had agreed to form a $3 billion joint venture to build a car manufacturing plant in Gujarat, pending approval from New Delhi. However, M&M later clarified that the report was unfounded.

Ahead of the GIM, the state will conduct roadshows in Chennai, Bengaluru, Mumbai, and Delhi, showcasing its potential. The government is planning to develop Kerala as a high-tech hub within 10-15 years. 

“We are focusing on knowledge-based industries. Our strength is highly skilled human resources,” the minister noted. The state has zeroed in on 22 knowledge-based sectors, including generative AI, blockchain technology, data analysis, machine learning, robotics, and nanotechnology.

“We have identified 22 priority sectors based on our strengths and weaknesses. Land is very limited —1.2 per cent of the total landscape of the country and 2.8 per cent of its population. However, we contribute 4 per cent of the gross domestic product (GDP) of the country. We are the ninth-largest economy in the country, and our per capita income is very high,” he added.

Earlier in the day, M&M issued a clarification, stating that the reports regarding its Gujarat plans were untrue. “As there has been some unnecessary speculation raised by the Reuters article, the company considers it necessary to clarify to the stock exchanges that the article is unfounded and there is no truth in the matter,” M&M informed the stock exchanges.