Mahindra's newly established EV subsidiary may source batteries from LGES

At a time when Indian EV sales keep increasing, Mahindra & Mahindra, the fourth-largest passenger vehicle brand in India, has established an EV subsidiary and reportedly may source batteries from LG Energy Solution (LGES).

According to The Economic Times and Mint, Mahindra & Mahindra raised US$250 million from British International Investment and established Electric Vehicle Co for Mahindra & Mahindra's electric four-wheeler passenger business. The identified assets of Mahindra & Mahindra's electric four-wheeler passenger vehicles will be transferred to the subsidiary.

Meanwhile, Reuters quoted sources saying that LGES is set to supply batteries to Mahindra & Mahindra's XUV400 SUV, expected for delivery between the fourth quarter of 2022 and January 2023. M&M and LGES signed a deal for lithium-ion battery supply in 2018, but according to Bloomberg data, Samsung SDI, instead of LGES, is one of M&M's suppliers.

Mahindra & Mahindra partnered with Volkswagen in May and will introduce EV components such as electric motors, battery system components, and battery cells from Volkswagen's MEB platform and use them in Mahindra & Mahindra's Born Electric platform.

Anish Shah, CEO of Mahindra & Mahindra, told Reuters that the Volkswagen deal would meet their short-to-medium term battery needs, but they are open to investing in a global cell leader to secure future supply, adding that Mahindra & Mahindra is not to get into the battery manufacturing business because there are already players doing well.

Rajesh Jejurikar, executive director of Mahindra & Mahindra, told The Economic Times that the company has developed an EV plan and is expected to announce more details on August 15. Mahindra & Mahindra expects 20-to-30% of SUVs to be electric by 2027.

Although Mahindra & Mahindra said they have no intention of engaging in lithium battery cell manufacturing, the company applied to join the Production Linked Incentive (PLI) scheme for advanced chemistry cell. Mahindra & Mahindra was not awarded the cash incentive unde the scheme but was eligible for the PLI for automobile and auto components.

Currently, Tata Motors leads electric four-wheelers sales in India, accounting for 90% of the market. M&M is far behind and sold only 1,386 electric four-wheelers between 2019 and the first half of 2022, of which 895 were passenger cars.

Source: Vahan Dashboard, July 2022