In a major show of confidence in the fledgling EV venture of Mahindra and Mahindra (M&M), the British International Investment (BII), the UK’s development finance institution and impact investor, is to invest up to $250 million (roughly Rs 1,925 crore) in the company that will focus on four-wheel (4W) passenger electric vehicles.
M&M itself will match BII’s investment of $250 million, and the two companies will work to attract other like-minded investors into the new EV business over the next few years.
The first round of BII’s capital investment will be completed not later than June 2023 on fulfilment of certain agreed-upon conditions and the balance post completion of certain milestones in the financial year 2024. The total capital infusion for EV company is envisaged to be around Rs 8,000 crore ($1 billion) over the next five years.
M&M will unveil its EV philosophy and product line-up on August 15 at its site in Oxfordshire.
New EV company to create 8000 skilled jobs
Mahindra & Mahindra, which has called its entire EV strategy 'Born Electric Vision', plans to bring in 16 EVs to the Indian market in the next 7 years. These 16 EVs include 8 electric SUVs and 8 electric light commercial vehicles. The company has already teased three concept models as the first of its EVs for India. The first of Mahindra’s Born EVs will likely hit the markets in 2025. The first SUV from the stable, though, will be launched in the first half of 2023, and it will be its top-seller XUV 300 making the electric transition.
BII said that the investment in the new EV company supports its undertaking that at least 30% of its total investments will be in climate finance.
The new business, which will develop four-wheel passenger EVs for Indian consumers and other markets around the world, will contribute towards 2.1 million tonnes of C02 equivalent emission avoidance and lead to the creation of around 8,000 skilled jobs – a quarter of which is expected to be women.
It will also support an ecosystem of component manufacturers and make electric vehicles accessible to more people. BII's investments will be in the form of compulsory convertible instruments at a valuation of up to Rs 70,070 crore, resulting in 2.75% to 4.76% ownership in the EV company.
M&M, which is planning a major splash in EV segment, has already tied up with Volkswagen for use of its MEB (modular electric drive matrix) components.
According to a recent survey by Roland Berger, a leading global automotive consultancy, Indian consumers are twice as likely as their counterparts in the UK and the US to consider the purchase of an EV.
