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Mahindra: An Electric Impression “Fo-REVA”? 🚗



mahindra reva e2o

Did you know that before Tata Motors came out with its EVs in 2019, Mahindra & Mahindra (M&M) had launched a tiny car known as the e2o, in collaboration with REVA, in 2013?


This Rs. 8 lakh, let’s face it, 4-door auto rickshaw, was far too expensive for the minuscule 100 km range it gave per charge (1/3rd of EVs available now) - and was shunned by all. Cut to 2024, Tata Motors has killed it with a 72% market share in the EV space, with MG at a far-off second place (10% market share), and M&M nowhere in this picture - until now!


The company which holds the No. 1 spot in the country for SUVs (20% market share) and Light Commercial Vehicles (47% market share), termed the most diversified automobile company in the country, has a dynamic plan to “rise” up in the EV industry by December 2024 - but how exactly will it make its entry?


1. Capitalising on SUV Success

A lesson the company learnt from its REVA e2o days was that building a completely new EV car line from scratch was not a prudent decision, especially since it made its first attempt way ahead of its time.


Instead, it went on to focus on what it is good at - SUVs.


M&M had the presence of mind to realise that its sedans and hatchbacks weren’t cutting it in the market (being the 4th player in this space and seeing declining sales) and had the foresight to predict that utility vehicles would be the next big thing.



suv sales vs passenger vehicle sales india

What followed in the decade after the e2o launch was exactly as predicted, with 2023 seeing the first time in 10 years that utility vehicle sales surpassed passenger vehicles!


Furthermore, while the overall utility vehicle market saw an average 30% growth YoY in 2023, M&M outshone with an average of 45% growth in its SUV best-sellers like Bolero, Scorpio, XUV 700, and Thar.


These models have driven the company towards that No. 1 spot in this segment, with market share growing from 10% to 20% during the decade!



What’s the EV angle?

  • India is finally at the inflexion point of seeing SUV sales take off, while also being labelled the fastest-growing EV market in the world

  • With the expectation that EV SUVs will hold a 17% share among total SUVs sold in India by 2030 (as opposed to less than 5% now), M&M stands to gain the most by doing one simple thing - launching EV versions of its market-leading SUVs!

  • Building off the brand that it has established with its SUVs, it automatically becomes the first word in EV SUVs as well

  • EV versions of the XUV 700 and Thar are already underway as M&M is being eyed as the most-awaited EV launch of the year, with the management expecting the EV SUVs to make up for 30% of its SUV sales in 5 years!

2. The Commercial Play

As we established in the beginning, M&M is also a market leader in the LCV space, with its small pickup trucks being widely used across the country for logistics, and the future seems to hold an exciting new tailwind for this segment - last-mile connectivity.


  • In the case of pickup trucks, it is essentially the “dispatch” bit of your online order where the products are shipped in bulk to and from warehouses - but last-mile connectivity also applies to humans!

  • Autos and buses that take you to and from train and metro stations are part of the last-mile connectivity in a person’s journey

Both of these areas reek of emissions due to the poorly maintained fossil-fuel-powered engines with tailpipe smoke that reaches your home - so M&M decided to do something about this as well!


What’s the EV angle?

  • To tackle both these problems, M&M has launched Last Mile Mobility - a range of EV vehicles that target this exact subset of the market. With a 3W LCV EV and an EV auto rickshaw, the company has received acclaim as it holds 15% of this market in its hands (in constant contention with equal market share holder Bajaj Auto)

  • The Treo and Alpha models (which have been developed from their petrol and diesel predecessors) of these vehicles showcase an impressive operating cost reduction to the tune of 50% when compared to their fuel-based counterparts, making these the best the country has to offer currently.

  • Furthermore, the auto rickshaws are categorised as something known as L5, which are faster than Bajaj’s EV autos and can carry heavier loads!

  • With penetration at an average of 20% right now for 3W EVs (both autos and LCVs), it is expected to see this number go to 40% by 2030, with M&M leading the pack

3. Creating a New Identity

Along with its new brand identity that it launched in 2021, M&M is also “birthing” a sleek new sub-brand called BEV (Born EV) for completely new EV SUVs, amalgamating its experience in creating brilliant utility vehicles, and adding a modern, premium twist!


mahindra ev

By yet again building off the tried and tested, it intends to launch the XUV variants first (priced at par with MG at around Rs. 25 lakh). Furthermore, it has acquired an innovative platform called INGLO that can optimise the manufacturing process as it can hold both the BE and XUV variants, despite them being of different wheelbase lengths!


While this is yet to be launched, these cars look impressive enough to be the talk of the town, with orders for these cars having crossed the 3 lakh units mark (that is almost as many SUVs they sell in a year)!


Re-rating Opportunity?

All of the above sounds super cool, but how could this translate into material gains for the company’s valuation? Take Tata Motors for example!


For a business that didn’t exist in 2018, the EV segment has taken the company and industry by storm for Tata Motors as of 2024:


  • 72% market share

  • 20% of revenues and 20% of company valuations

  • While non-EV segments of the business trade at around 1.1x EV/Sales, the EV segment trades at 1.4x EV/Sales

  • As per the latest funding round, the Tata EV garners a valuation of more than Rs. 70,000 crore, with Tata owning 89% of that

  • From trading at a 2x EV/EBITDA in 2018, the stock now trades above at around 6x EV/EBITDA, with a majority of this re-rating being attributed to the EV segment’s performance and future growth potential

Tata Motors entered at the right time with the right product and snatched the market and its valuations for itself - and M&M seems to be on a similar trajectory.


With the intention to raise funding at similar early-days valuations of Tata Motors at around US$ 9 billion, M&M might just be able to snatch the SUV and LCV markets the way Tata Motors did for smaller Passenger Vehicles, making for a strong case for re-rating from current levels!


In addition, the company has two more things in its favour:


  • potential demerging and separate listing of its Passenger Vehicle, Commercial Vehicle and Farm Equipment businesses (Tata Motors is doing the same)

  • the fact that M&M also holds a significant stake in the Mahindra group companies like Tech Mahindra and M&M Financial Services (aggregate value of all its holdings comes at Rs. 63,250 crore which is 30% of M&M market cap)

All of this makes M&M quite the comeback-king, and might just be the auto company you should be riding!




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