M&M stops producing India's first electric car model amid flagging sales

Mahindra Electric Mobility, the electric vehicle arm of Mahindra & Mahindra (M&M), has discontinued the production of the e2oPlus, the four-door hatchback based on the Reva platform, for the domestic market amid flagging sales and tightening safety regulations, said people aware of the development, marking the end of the road for India’s first electric car model. Mahindra produced the last unit of the e2oPlus on March 31.
 
Mahesh Babu, chief executive at Mahindra Electric, confirmed that the company had stopped the production of the model for the domestic market. The move, he said, was in line with the company’s plan to “reorient the electric hatchback” segment.
 
“Since there are some regulations on airbags and ABS (anti-lock braking system), we are reorienting our hatch segment,” said Babu. The phase-out, he added, was part of the model changeover plan. The e2oPlus will continue to sell in neighbouring markets such as Nepal. In India, it will be replaced by the electric version of the KUV100 later this year.
 
“We want a good hatch and believe the eKUV will be a perfect fit for the segment,” said Babu. Mahindra first showcased the model at the 2018 Auto Expo. Mahindra is currently the only carmaker in India that sells electric cars (the e2oPlus and eVerito). The carmaker might launch the eKUV under the e2o brand, said a person familiar with the company’s plans. Another reason for discontinuing the e2o model was poor sales, said Babu, adding that on average the company was selling around 50 units in the personal segment.
 

Mahindra acquired a controlling stake in Bengaluru-based Reva Electric Car Co (RECC) in 2010, hoping to take advantage of the rapid pace at which the electric vehicle market was expected to grow over the next decade amid the push for stricter emission norms globally.
 
The Reva had had its share of woes and it never took off in the Indian market, with reasons ranging from high acquisition cost to uncertainty over the government’s EV policy, among others. Between 2001, the year the company was founded, and 2010, RECC had sold only 3,500 units of the model. With the acquisition, Mahindra had expected a head start of three to four years over potential rivals. Subsequently, in 2013, Mahindra bought the remaining stake of the Maini family in RECC, merged the company with the parent firm, and renamed it as Mahindra Electric Mobility.
 
Despite fresh investment and regular interventions, the model’s sales remained low, amid policy flip-flops on electric vehicles and non-acceptance of electric vehicles for personal use by car buyers. In the year ended on March 31, Mahindra Electric sold 350 units, including the E2O, eVerito, e-three-wheelers and e-vans, in the domestic market, down 45.82 per cent over the same period a year ago.