Mahindra Group inks pact with Volkswagen to expand EV range

India's Mahindra & Mahindra has planned to get additional components from other firms to expand its electric vehicle (EV) range.

Mahindra previously focused on creating EV components in-house but has now switched gears to build partnerships to achieve quicker development in the category.

Mahindra signed a collaboration agreement with Volkswagen to explore using Volkswagen motors, battery system components, and cells in its EVs.

Although Mahindra is betting big on building its electric vehicle portfolio, it will face stiff competition from Tata Motors in India, where the clean mobility sector is booming.

Anish Shah, the Managing Director and CEO of Mahindra Group, told the media that the world is becoming more partnership-oriented. Rather than doing everything ourselves, it's preferable to choose the best available.

He said at this point, it's Volkswagen (VW), and they have comparable capabilities in other areas.

Shah said they are open to looking at other components that they would bring in, as well as doing what they are extremely strong at in-house.

As India strives to reach its climate change and carbon reduction targets, Prime Minister Narendra Modi is offering companies billions of dollars in incentives to manufacture EVs.

India's EV industry accounts for barely 1% of the country's yearly vehicle sales of over 3 million automobiles, with consumers continuing to prefer fuel-guzzling vehicles that are significantly more economical.

Tata Motors controls India's EV sector and got $1 billion in funding from TPG last year. MG Motor India, which is owned by SAIC Motor of China, is also planning to raise funding to expand its EV business.

Shah said that they will always be open to value creation possibilities and that Mahindra will utilise substantial sums for EVs and has them ready.

Mahindra maintains a portfolio of electric commercial vehicles in India, but the company's most recent push is on passenger automobiles, notably sports utility vehicles (SUVs).

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