Why Mahindra is betting big on its first fully-electric SUV, the XUV-400

The Mahindra Group’s first fully electric SUV, the XUV-400, will cater to a market of 90,000 customers who presently own SUVs with internal combustion engines (ICE), the group’s executive director (auto and farm sectors), Rajesh Jejurikar, told CNBC-TV18.

“There is a market comprising 30,000 with ICE-equipped SUVs in the C-segment and another market of 60,000 in the B-segment,” said Rajesh, along the sidelines of Mahindra’s high-profile launch.

“The XUV-400 allows us to straddle both, and we think there is a big opportunity because the current penetration in the B-segment and C-segment is very small — less than 1 percent in the C-segment and 3-4 percent in the B-segment.”

The Mahindra Group launched its flagship XUV-400 late on Thursday. The car is the group’s first shot at a fully electric SUV. It comes with a range of 456 kilometres, acceleration of 0-100 in 8.3 seconds, and about 50 minutes for a charge of 0-80 percent through fast charging.

Mahindra XUV400 EV First Look: Check Features, Specifications

However, Mahindra has been tight-lipped about pricing — Jejurikar said a decision would be taken only after getting a market pulse. “Figuring out the right price is an art and a science, and we want to use the next two to three months to determine the right value proposition and find out what price would be our sweet spot.”

This quest for price determination means the XUV-400 will have a price tag only by January 2023, with deliveries slated to begin by the end of the month.

In the interim, the company hopes to launch a promotional blitzkrieg, comprising events and experiential drives — all to get the customer interested. And it should. After all, great effort has gone into making the XUV-400 right from investments.

“We have invested Rs 500 to 600 crore to make the XUV-400, which also includes making the 4.2-metre version and not just the electric vehicle,” Jejurikar said.

There’s more riding on the fortunes of the XUV-400, at least as far as Mahindra’s EV rollout plan is concerned. With the company’s first “fully born” SUV slated for a late 2024 launch, Jejurikar clarified that the XUV-400 will be the group’s only EV offering till then: “Between now and 2024, we have no launch in the EV space, so this will be our mainstay for the next couple of years.”

That strategy owes its existence, in part, to Mahindra’s decision not to cater to every segment of the EV market. For instance, there are no plans to launch an affordable EV, while all talk of iconicity and brand value remains firmly on SUVs that now come embossed with Mahindra’s new “twin peaks” brand logo. The XUV-400 will follow suit. The company also has plans to float a separate company for its EV offerings soon.

In its exploit to build more SUVs and hit the pedal on their sales, the risk of a global supply chain breakdown looms large over Mahindra. As things stand, China has control over a vast majority of Lithium reserves and processing units, which have caused strains on global supplies, 75 percent of which is controlled by the country.

Analysts have predicted that escalating prices and a supply chain crunch could slow down the pace of EV manufacturing. More recently, a major power cut in China’s Sichuan province brought battery-making to a halt, causing another interruption to the supply chain. However, Mahindra believes its Volkswagen partnership could tide over such challenges.