Mahindra ready to invest in EV battery cell maker to secure supplies, says CEO

NEW DELHI, July 10 (Reuters) – Indian company Mahindra & Mahindra (MAHM.NS) may consider investing in a battery cell business to meet future electrification needs, its CEO said, after the company has raised funds for its new electric vehicle (EV) unit at a valuation of $9.1 billion.

Mahindra raised $250 million from British International Investment for the unit on Thursday and is exploring a partnership with Volkswagen AG (VOWG_p.DE) to source electric vehicle components such as batteries and motors. Read more

While the Volkswagen deal would address Mahindra’s “near to medium term” battery needs, Mahindra CEO Anish Shah said the company was willing to consider some sort of “investment with a world leader” in the field of battery cells if it needed to secure the future. Provisions.

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“Our intention is not to get into (manufacturing) batteries,” Shah said in an interview. “There are people who do it very well. We can partner with them; we could be a co-investor in some form. We don’t have to own and run it.”

Mahindra plans to launch five electric sport utility vehicles (SUVs) over the next few years. These models are expected to contribute up to 30%, or approximately 200,000 units, of its total annual SUV sales by March 2027.

Growing demand for electric vehicles and disrupted supply chains around the world are driving automakers to look for ways to better control supplies and costs. Some automakers are spending billions of dollars on mines and motor and battery factories — a break from years of reliance solely on suppliers.

Automakers are also wary of situations such as the pandemic shortage of semiconductors that lead to production stoppages. Many companies are still facing backlogs due to supply issues.

Shah said that with the exception of batteries and motors, most components for electric vehicles are not much different from combustion engine cars and Mahindra produces the majority of these parts in-house.

“If we can get a deal like the one we have with Volkswagen to secure (battery) supplies, that’s what we’ll do. If there’s any investment we need to make to secure those supplies, we’ll do that. “, did he declare.

Mahindra’s plans come as Indian companies seek to capitalize on billions of dollars in government incentives to build electric vehicles, as part of a policy to meet national climate change targets and reduction of carbon emissions.

India’s electric vehicle market, dominated by local automaker Tata Motors (TAMO.NS), accounts for just 1% of the country’s annual sales, or about 3 million vehicles. The government wants this figure to rise to 30% by 2030.

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Reporting by Aditi Shah; Editing by Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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