Mahindra & Mahindra has strengthened its position in India’s electric vehicle (EV) market by winning a contract to supply 1,000 EVs to the Bengaluru-based transport firm Baghirathi Travel Solutions Pvt. Ltd.
An official at Mahindra confirmed the development to Mercom, saying that this is a blockbuster deal for India’s fledgling EV sector and it is expected to be worth more than ₹1 billion.
“This order is more than six times (the size of) the earlier order we bagged from the Energy Efficiency Services Limited (EESL),” the official said.
According to the Mahindra official, the EVs will be supplied in 10 batches of 100 vehicles each and will be used to augment Baghirathi’s existing owned and operated fleet of 2,000 vehicles in the city of Bengaluru.
The contract is much larger than the one Mahindra won from EESL last year. In that deal, Mahindra had to reduce its quoted price for the vehicles and was then awarded a contract for just 150 EVs of the 500 EVs scheduled for the project’s first phase, Mercom reported. In that tender, winning the contract came at a cost for Mahindra.
When asked about the cost per unit and Mahindra’s profit margin for the latest contract, the official replied, “The E-veritos being supplied to Baghirathi are higher-end models than the ones for EESL. Even the costs are higher in this case.”
India’s EV sector has become increasingly competitive in recent years. A study by Niti Aayog and the Rocky Mountain Institute released in November highlighted the staggering potential of India’s EV market. Researchers found that India could account for more than one-third of the global market for EV batteries by 2030 if it becomes a 100 percent EV nation. The study also estimated that India’s market for EV batteries could be worth as much as $300 billion (~₹19.38 trillion) from 2017 to 2030.
The government is doing its part to promote more widespread adoption of EVs. In November, it announced plans to provide up to ₹1.05 billion (~$16.2 million) in grant funding for the purchase of EVs to be used for mass transportation. That funding is being made available through a pilot project under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) program.
The government’s funding announcement appeared to be creating the desired effect in January, when Mercom reported that the Karnataka government was all set to procure 640 EVs under the FAME program.
India’s EV market could continue to grow with continued government support, ultimately opening up more expansion opportunities for EV manufacturers like Mahindra.