Even as India's transition to electric vehicles continues and global competitors introduce new powertrain categories in the domestic market, Mahindra & Mahindra (M&M) is expanding its internal combustion engine (ICE) and international-market operations.

The company is responding to continued domestic demand for diesel sports utility vehicles and consumer concerns over ethanol fuel blends by expanding manufacturing capacity and planning more than 10 new combustion-powered SUVs and six battery electric vehicles (BEVs). These will include dedicated electric models and multi-energy vehicles based on platforms such as the new NU-IQ architecture, along with a lifestyle pickup truck unveiled on Saturday.

During the Independence Day weekend, M&M unveiled the Scorpio Lifestyler pickup, which is scheduled to launch in April at a price below Rs. 2 million. The model is intended for international markets and will also be positioned as a new vehicle category in India. The company also launched the BE 6 Sporteq, an upgraded electric SUV.

SUV demand remains high, with M&M targeting growth in the high teens in Q1 FY27 after recording 20% growth in July. The company expects light commercial vehicle (LCV) growth to moderate to the high single digits and tractor growth to around 5% as higher commodity costs are passed on to customers in this price-sensitive segment.

On the transition to EVs, Jejurikar said adoption is increasing. M&M's EV share increased from zero in March to nearly 12%. Jejurikar expects adoption to continue as more users gain experience with EVs and through word of mouth.

"In three-wheelers, that category penetration moved from 20% to 23% in 2024 to about 45% now. It's quite a remarkable pace of transition. So, I think India will grow, but I don't think it will be at the pace of China, as China tends to set up infrastructure before demand, while in India we do it in steps," he said.

He further added that the growth is profitable. "EVs were profitable from the first quarter we launched. We are roughly making about Rs. 2.3 billion (US$ 24 million) of profit before income tax per quarter."

M&M, the largest SUV company by revenue, aims to maintain its share of the commercial vehicle market. Its core automotive margin, covering ICE SUVs and EVs, stands at 9.5%-10.5%.

West Asia has had limited impact on demand, while commodity inflation and labour shortages have constrained supplies.

"The supply situation is overall tight because demand has been strong. Strangely, what has affected supply more in the last three to four months has been labour shortages in the country, especially with our suppliers. While the gas shortage triggered supply issues, after that, the elections resulted in a lot of labour moving to their hometowns."

The pickup was developed over three years following its concept debut in 2023 and is intended for recreational travel and use on farms and plantations. Production will begin at Chakan using shared facilities, although a new body shop will be required. M&M expects volumes to increase gradually, as they did for the Scorpio and Thar.