M&M says govt EV deal not profitable

A day after matching the price offered by rival Tata Motors to supply 30% of electric vehicles to state-owned Energy Efficiency Services Ltd (EESL), Mahindra & Mahindra (M&M) said that it will not be making any money on it.

The auto major even questioned the pricing offered by Tata Motors, terming it as ‘incomprehensible’.

Speaking in a conference call, M&M managing director Pawan Goenka said, “The price offered by L1 bidder is very hard to comprehend.”

He also said that his company has not yet taken a call to bid for the second phase as it will now depend upon how it can bring down the price of the vehicle and would not like to take up until it becomes financially feasible.

According to Goenka, he is able to comment on pricing by L1 bidder because M&M has been into the electric vehicle (EV) business for over five years and has scouted the world, and very well knows the charges for the sub-system required for it.

However, Goenka said that he is not aware of the specifications including the battery size being offered by Tata Motors in their vehicles as a significant cost depends upon it (size of the battery).

Talking about efforts that will be required on part of M&M to bring down the cost of the vehicle, Goenka continued, “We will be going back to the suppliers and bargain hard with them” Goenka continued.

M&M, which was the second bidder, was offered by the EESL to supply the rest of it by matching the price offered by Tata Motors.

However, M&M chose to supply only 150 units, considering the loss of Rs 2.30 lakh it would be making on every car.

The third bidder was disqualified from the bid.