M&M Plans to Foray into EV Segment Soon

With Tata Motors already into Electrical Vehicles in a substantial way and having aggressive expansion plans, M&M is also not too far behind. In fact, M&M plans to launch as many as 16 EV models by the year 2027 and this will be across the SUV and the light commercial vehicles (LCV) space. With EVs likely to drive the future of the auto industry and also with most of the valuation metrics gravitating towards EVs, M&M is playing the big game.

The proposed portfolio of four wheelers put out by M&M is meant to strengthen the company's leadership position in India's electric mobility segment. M&M targets that nearly 15-20% of the revenue growth will be achieved by the EV business by 2025. However, M&M has not yet committed itself on whether it would prefer to bring in private equity investors or carve out its EV business into a separate entity to drive its growth organically.

Back in 2021, Mahindra & Mahindra had already announced an aggressive Rs.3,000 crore plan to invest in EVs. It may also explore a separate branding for its EV business to avoid any overlap with its existing IC Engine franchise. By 2027, M&M is planning a total of 13 new launches of which 8 will be electric vehicles (EVs). In fact, M&M is planning that nearly 20% of its total volumes of utility vehicles by the year 2027 will come from electrical vehicles.

Interestingly, the EV franchise of M&M is likely to extend beyond passenger cars to include LCVs and even farm equipment, which is one of the growth drivers of the M&M group in the last few years. For boosting this business, M&M is looking to infuse capital as well as bring in technological expertise into this business. M&M is looking for expertise from strategic partners as well as from PE funds which can bring in top of the line best practices.

M&M had last posted quarterly revenues of Rs.21,470 crore in the Sep-21 quarter. The biggest business bet for M&M at this point in terms of verticals is the farm equipment business where it expects the business revenues to grow by 10-fold by the year 2027. But from the stock market perspective, the big area of interest will be the launch of a slew of EVs, which will pit the company against leading EV players like MG Motors and Tata Motors.

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