Mahindra & Mahindra is taking a measured approach to scaling up electric vehicle (EV) volumes, according to the company's top management during a recent Q&A session with analysts following its fourth-quarter results. The transcript of the session has since been published on the company's website.

"This is a business in which we do not want to act rashly or ramp up operations prematurely for two reasons. First, the product complexity is significant. Second, both we and our suppliers are acquiring new technological capabilities as we scale. Therefore, we must proceed cautiously in ramping up production," stated Rajesh Jejurikar, Executive Director and Chief Executive Officer, Auto and Farm Sectors.

Over the past 40 days, he added, the company has also identified the need for caution in the vehicle delivery process, as EVs are more complex than initially expected or compared to internal combustion engine (ICE) vehicles.

Delivering an EV to a customer takes a minimum of two hours, which is not always sufficient. Multiple applications must be installed on several family members' phones, requiring additional time and resources.

In large dealerships, the volume of deliveries has exceeded the capacity to manage the process efficiently. "As a result, we have taken the decision to slow the pace of deliveries during April and May to ensure that customer experience is not compromised," Jejurikar explained.

Ongoing learning process

The Mahindra & Mahindra team noted that substantial learning was required prior to initiating deliveries of the first batch of vehicles. This process involved delays in some customer delivery timelines, which led to pressure on dealerships to release vehicles that were not fully updated.

"We halted that approach and accepted delays in customer deliveries. There were significant learnings during this phase, and even now, as customers continue to drive these vehicles, we are identifying areas for improvement, which we will continue to address through updates," he elaborated.

The company intends to use software updates to address product issues and improve functionality. For example, updates related to Apple CarPlay will be made available across all vehicles. "We are consistently working on customer feedback and will continue to improve the product," said Jejurikar.

The BE 6 and XUV 9e are intended to serve a design-focused segment at accessible price points. "The design narrative is now unfolding, as the product has road presence. As more vehicles appear on the road, this will influence customer perception," he added.

Product features and distribution strategy

The product offering includes features such as audio systems and auto park assist. The EV driving experience includes characteristics such as quiet operation and reduced mechanical noise.

From a manufacturing perspective, Mahindra & Mahindra is utilising existing production facilities rather than establishing a dedicated EV plant. This approach extends to its dealership network, allowing for increased throughput without requiring major additional investment.

According to Jejurikar, establishing a network of 300 outlets quickly would be difficult for any new entrant, particularly at the price points Mahindra is targeting. He added that reaching smaller towns is made possible by the existing dealer network, though he acknowledged that creating viable operations in Tier 2 and Tier 3 regions at current price levels may be difficult.

Steady bookings and delivery timelines

Bookings for the two EV models have remained consistent. The company had chosen to observe production stability before announcing confirmed delivery dates. With greater confidence in production output, it is preparing to communicate specific timelines to customers.

"There has been some uncertainty among customers due to the absence of specific delivery dates, but the average waiting time is currently around four months," said Jejurikar. A majority of these customers are purchasing a Mahindra vehicle for the first time.

Booking data shows that the Pack 3 top-end variant is the most in demand. While there is some interest in Packs 1 and 2, customers have expressed a preference to inspect the vehicles in person before committing.

For the April-June quarter, most sales are expected to come from Pack 3, which is currently the only variant being retailed. "To achieve higher volumes, a broader sales mix across Packs 1 and 2 will be essential," Jejurikar stated.

To meet volume goals, Mahindra will need to generate at least 25-30 per cent of its sales from Packs 1 and 2. A notable segment of buyers is seeking the 79 kWh battery option in lower-spec variants-contrary to the company's earlier expectation that this battery would be limited to the top-end variant, with others using the 59 kWh option.

Prioritising range

"For many consumers, driving range is the key priority, and they place greater value on this than on additional features. As a result, we will need to create new variants featuring the 79 kWh battery but fewer premium features, to deliver ranges of 450 km, 500 km, and beyond," Jejurikar explained.

Initially, Mahindra had skewed production in favour of the BE 6 over the XUV 9e. However, the current mix is now 60:40 in favour of the latter. Both vehicles share the same battery pack, and the 79 kWh and 59 kWh units are interchangeable. The company is now managing its supply chain by distinguishing between unique and shared components across all packs.

"We are no longer ordering by variant, but rather by exclusive versus common parts. We are building inventory accordingly," Jejurikar said. This approach introduces some variability, but shared components are being stocked for flexible use across variants.

Market outlook

While the broader automotive industry is projected to grow by 2 per cent this year, Mahindra & Mahindra expects to exceed this rate. This projection is based on several factors, including full-year sales of the Thar Roxx, which was available for only six months last year.

Similarly, the XUV 3XO will have a full-year market presence, unlike last year when the XUV300 was phased out ahead of its launch. "These are important considerations when assessing growth," said Jejurikar. Additionally, EV sales volumes are expected to be incremental and not displace existing products.

"The three-door Thar continues to register growth and has not been impacted by the Roxx. These two variants appeal to different customer segments. Taking all these factors into account, we expect to outperform the overall market," he concluded.