M&M Plans To Raise More Funds For EV Arm But Not In A Hurry, Says Rajesh Jejurikar
Mahindra plans to become a global brand powered by new electric vehicles, Rajesh Jejurikar says.
Mahindra & Mahindra Ltd. plans to raise additional funds for its electric-vehicle subsidiary over next two years, but is not in a rush to complete the process, according to Rajesh Jejurikar, executive director of the company's auto and farm sectors.
On Sept. 8, the automaker unveiled the XUV400 -- its first electric vehicle in the SUV segment that will lay the groundwork for further launches lined up for 2024-2026.
M&M plans to become a global brand powered by new electric products, and is searching for like-minded partners to raise funds for the EV arm, Jejurikar told BQ Prime on the sidelines of the XUV400 launch.
Here are edited excerpts from the interview:
You have raised funds for your EV subsidiary. Do you have any plans to raise more funds in the coming years, or are you going to rely on your funds from now on?
Rajesh Jejurikar: So, just to circle back a bit, we will create a new company, which will be for electric SUVs. That new company has been valued at $9 billion. The first investor in that is BII (British International Investment), who will bring in $250 million. We are matching that amount to begin with.
Over the next two years, we will raise more funds in that company. But we are not in a hurry to do that... We will do that in a way that we get like-minded partners. And that process can take a couple of years. No immediate need to do that.
You have announced your plans last month to launch five electric vehicles. What was the reason to launch the XUV400 before that? Was it about getting your foot in the door before the market makes up its mind about the brands known for selling EVs?
Rajesh Jejurikar: In the evolution of a product of a company, you'll have a portfolio of products which will come at different stages of evolution. So, the XUV400 is a very good product offering for today's consumer, and it will evolve with time.
The products that are going to come in 2024-26 are futuristic products, which we are announcing today, so that people know that we have a portfolio and a portfolio strategy with the commitment to the electric vehicle business.
But, the XUV400 that we are launching today is in today's context. It's a best-in-class product amongst any C-segment SUV on every parameter.
You plan to start an electric-only brand BE. Since you are already launching electric SUVs under the XUV brand, why did you feel the need for a separate brand for electric-only vehicles?
Rajesh Jejurikar: BE will be an electric-only brand, but other brands like the XUV will not be electric-only—but both for electric or ICE (internal combustion engine).
The reason for creating an all-new brand called BE is that it allows us to express ourselves for a different, evolving consumer in a different kind of design language.
So, when we have an XUV, it has to follow a design language of that brand. But when you do a completely new brand, which is only electric, then it can break away from the mould of the kind of product design that we have today. So, it allows us a different form of expression.
So, you plan to target a different consumer. Are they going to be consumers of premium vehicles?
Rajesh Jejurikar: Well, not necessarily premium, but, let's say, consumers who are looking for a different expression of self, different than what Mahindra is at the moment.
And this allows them—of course, the brand will be a part of Mahindra portfolio—but it allows a different design language which is bolder, more expressive, and more audacious.
The new EV arm secured funding; you have signed a Memorandum of Understanding with Volkswagen for getting parts for a future platform; there are plans for charging networks in place. It looks like M&M is looking to establish a global identity and enter international markets?
Rajesh Jejurikar: We will look at going global with electric, but we are still to define which markets and the timing on that. But, there will be a plan for a global launch.
What do you think M&M can offer, which is different from many global brands that are looking at electric?
Rajesh Jejurikar: When you look at electric vehicles, the space is about new brands and new startups and so on and so forth, compared to the old ICE engines.
So, around the world, you see brands which are completely new coming up to compete. We believe that that's the nature of the electric consumer and the electric market.
So, if you have a really good product which is well-designed—and we think we will have that—offering India's kind of cost advantage so that they can be priced well in global markets, I think we could have a good proposition.
All pieces are in place for a good festive season for the auto industry. You already have stretched waiting periods for the Scorpio-N, Thar and XUV700, and bookings are going to rise in the coming months. So, what is the plan to clear the pending orders? How do you plan to give the demo?
Rajesh Jejurikar: We've already ramped up our capacity quite a bit, and there is a plan to ramp it up, going forward. We already shared that we are investing more money to do that.
In November, we will announce a more specific quarter-on-quarter capacity ramp-up and how our capacity will go.
Do you think localising battery cell manufacturing in India has any distinct advantage when there's such a high cost to procuring raw materials?
Rajesh Jejurikar: We still have to make a decision whether we will localise cell manufacturing or not. ...but that's something we're evaluating closely, keeping all the factors in mind of cost, investments and partnerships.
How are you looking at supply chains, because right now we don't have domestic resources of raw materials for battery cells?
Rajesh Jejurikar: And that's why, we say, that there's value in partnering with somebody like Volkswagen, because they have access all the way down to mines. So, they have invested $40-$50 billion in the electric space in multiple areas.
