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M&M shares comprehensive plan on being future ready; going full throttle on EV front!

ICICIdirect Research 13 Sep 2022 DISCLAIMER

What's Buzzing

M&M recently hosted its EV day wherein it showcased its upcoming EV products and competitive strength of the new platform i.e. "INGLO". The company shared comprehensive plans with timelines in this domain with strong intent to stick to its core SUV strength (4.3-4.7 metre) in the e-mobility space. It the recent past, it also unveiled its first SUV offering in the electric space in the form of XUV 400, which will be equipped with 39.4 Kwhr battery providing a certified range of 456 km on single charge with fastest acceleration in this segment at 0-100 kmph in 8.3 seconds. 


Electrification is picking up pace domestically with Tata Motors leading the charge in the passenger vehicle segment. Current offerings in this space are limited to Tata Nexon (battery size: 30.2 KwH, certified range: 312 km, price: ~Rs 15 lakh), Tata Nexon Max (battery size: 40.5 KwH, certified range: 437 km, price: ~Rs 20 lakh), MG ZS EV (battery size: 50.3 KwH, certified range: 461 km, price: ~Rs 24 lakh), Hyundai Kona (battery size: 39.2 KwH, certified range: 452 km, price: ~Rs 24 lakh) and Mahindra E-Verito. M&M's XUV 400 is a classic C-segment SUV (length - 4.2 metre) competing against the existing incumbent OEMs. 

Our Perspective

Other key takeaways from the analyst meet include: (i) target to sell 20-30% of its SUV portfolio as electric vehicles by 2027 i.e. ~2 lakh units, (ii) entire EV capex outlay pegged at Rs 9,000-10,000 crore, which includes INGLO platform shared by all upcoming born electric cars, manufacturing set-up, cost of developing products including XUV 400 (specific spend at ~Rs 600 crore), (iii) upcoming collaborations in the charging infra space, (iv) born electric vehicles supporting all new age tech features including ADAS level 2+ with battery size pegged at 60-80 KwH with targeted certified range of 652-675 km. XUV 400 is M&M’s first SUV offering in the EV space. However, pricing for the same will be disclosed in January 2023 along with opening of bookings at dealerships. It can be charged from 0 to 80% using fast charger in 50 minutes. The product proposition is interesting with the company promising best in class technology, safety, style & space (boot space at 378 litre), range and acceleration. However, the price at which the product would be launched would be the key monitorable as it would be competing against Nexon EV Max and Hyundai Kona in terms of battery size. The company’s proactive approach, capex commitment in the EV space are encouraging but the timeline of events is a bit stretched and comes with a lag.

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