M&M looks to markets abroad as lack of subsidy puts brakes on EV sales
15 November 2013
Mahindra & Mahindra, maker of electric car Reva e2o, is looking at global markets to push sale as domestic sales slump after a government subsidy for electric vehicles (EVs) ended in March 2012.
''We will focus outside India where there is good support for electric vehicles (EVs). In fact, we have been wooed by many countries to launch our products there or make our products there,'' said Pawan Goenka, executive director and president–farm equipment and automotive sectors for M&M.
In fact, M&M is working on a variant suitable for the European markets like the UK and Norway. The product is expected to be ready by the first quarter of next fiscal.
The eo2 is already being sold in Nepal in a limited way and will soon be launched in Sri Lanka.
M&M launched the e2o –originally developed by Reva - in March to cash in on the environmental concerns in the hope that sales would pick up eventually.
M&M had expected to sell 400-500 units a month and also created a capacity to manufacture 30,000 units annually at Reva's plant near Bangalore. M&M had acquired Reva in 2010.
The company, however, managed to sell only 400 units so far since its launch this year.
EV sales in India have failed to pick up due to higher pricing and inadequate infrastructure like charging points, customer incentives, funding research and development (R&D) etc.
Pricing is a difficult issue foe electric vehicle manufacturers in the absence of government subsidy, the company pointed out.
''Because of the pricing situation, the product is not performing anywhere near to what we would have thought,'' said Goenka.
The government initially provided subsidy on the purchase of electric vehicles (EVs), including two-wheelers. The subsidy, however, has been short-lived and this has since resulted in a spike in prices.
Anand Mahindra, chairman of M&M, had said at the launch of the e2o in March this year that future sales would not depend on government aid ''but it would have been nice if there was some help from the government.''
As an extension to the EV policy, the central government announced an ambitious plan for EVs last year setting a target of selling 6 million vehicles by 2020.
The government also last year approved a Rs23,000 crore programme for the electric and hybrid vehicle production over the next eight years. However, the plans still are on the drawing board.
''We cannot say when the subsidy would come in. I hope we see some support soon from government for the green technology,'' said Goenka.
M&M, however, is working on new models to expand its EV portfolio, but would have to hold back new initiatives in absence of suitable government policies.
''We certainly would be delighted to launch more EVs. We have e2o right now and we are working on variants of e2o which will be launched in the next 12 months. Verito (sedan) electric that would be ready for launch in the May-June period. If subsidy is not there, we will not launch Verito electric,'' said Goenka.
Goenka said the electric version of light commercial vehicle, Gio and Maxximo would be ready for launch before this fiscal end. But, with no subsidy, we will have only e2o for sales,'' added Goenka.