Mahindra To Create New 4W EV Co; Jointly Invests INR 3,850 Cr With BII

Mobility Outlook Bureau
08 Jul 2022
01:13 PM
2 Min Read

Mahindra expects the first round of BII’s capital investment to be completed by June 2023 on fulfilment of conditions precedent, and the balance post completion of certain milestones in FY24.


UK’s Development Finance Institution and Mahindra & Mahindra have announced a binding agreement to invest up to INR 3,850 crore together into a wholly-owned subsidiary of M&M that will be newly incorporated (“EV Co.”) and will focus on four-wheeler passenger vehicles.

The company expects the first round of BII’s capital investment to be completed by June 2023 on fulfilment of conditions precedent, and the balance post completion of certain milestones in FY24. 

Khaitan & Co are the legal advisors to Mahindra, while Cyril Amarchand Mangaldas and Cleary Gottlieb are legal advisors to BII for the transaction. 

The British finance institute will invest up to INR 1,925 crore in the form of compulsory convertible instruments at a valuation of up to INR 70,070 crore, resulting in 2.75% to 4.76% ownership for BII in the EV Co. 

This valuation is based on certain milestones which the EV Co will achieve in the future. At this stage, the investment is solely towards the electric passenger vehicle business. M&M might make similar announcements in future around the electric commercial vehicles vertical.

A press release from the vehicle maker said the total capital infusion for the EV Co is envisaged to be approximately INR 8,000 crore between FY24 and FY27 for the planned product portfolio. It added that the funds will be utilised primarily to create and market a world-class electric SUV portfolio with advanced technologies.

Aggressive Plans 

The first product to be launched by the EV Co is the XUV400, which will be introduced in September, while deliveries will happen in Q1 2023. The company plans to share its comprehensive product, technology, and platform strategy at an UK event on 15 August 2022, followed by a reveal of the electric XUV 400 in September 2022. 

“We would expect between 20-30% of Mahindra SUVs being electric by 2027,” said Rajesh Jejurikar, Executive Director – Auto & Farm Sectors, Mahindra & Mahindra. Overall. The EV Co is looking five four-wheelers in the planned period. Mahindra will launch all these products in the sub-4 metre and above 4 metre SUV categories, where is currently has a very strong presence in India.

Mahindra aims to retail 200,000 EVs by 2027 and expects majority of these sales happening in India. EV exports, as per the company, will be an incentive on overall EV sales in domestic market.


Addressing the media, Jejurikar said the EV Co, like most other Mahindra subsidiaries, will follow an asset light model. It will be utilising the manufacturing might of Mahindra’s existing automobile manufacturing facilities.  While EV Co will focus on building itself onto brands that M&M has already created, which include Scorpio, Thar and the XUV, the new company will also have the power to independently create new brand, he said. There are, however, no plans to venture into the electric sedan market at the moment.

The company also ruled out any possibility or plans of investing in setting up battery charging infrastructure. As a matter of fact, it will be using Mahindra’s existing dealer network to reach out to the consumer. EV Co might also appoint new dealers in the future, it said. 

Towards Carbon Neutrality

Dr Anish Shah, MD & CEO, Mahindra & Mahindra said that the Mahindra Group aims to be Planet Positive by 2040. 

Nick O’Donohoe, CEO, British International Investment, said, “The acceleration of EV development in India will be critical to supporting the country in reaching its emission targets as well as improving air quality in many urban areas.”

Samir Abhyankar, Managing Director and Head of Direct Private Equity, British International Investment, said, “The investment into Mahindra’s EV business is in line with our decarbonisation strategy and focus of supporting sustainable business models that create new jobs, particularly for women.”

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