M&M, BII decreases final investment tranche in Indian arm of Mahindra Electric

Decreasing its funding from Rs 725Cr to Rs 650 Cr, the UK government’s  British International Investment Plc (BII) and Mahindra & Mahindra Ltd have revised the terms of their financial tranche for the investment in the Indian automaker’s electric vehicle unit Mahindra Electric Automobile Ltd (MEAL). The investment is reported to be completed by March 31.

With this, BII will now have invested a total of Rs 1,850 crore in MEAL in two tranches, and it will own a share in MEAL that ranges from 2.6-4.6%. Previously, a total of approximately Rs 1,925 crore was projected to be invested in MEAL. M&M stated that MEAL's overall business plan will not be impacted by the funding shift.

The goal of BII's investment is to greatly speed up the availability and uptake of electric vehicles in India and other areas that M&M serves. The money is mostly being used to develop and promote a portfolio of cutting-edge electric SUVs that are of the highest calibre.

In the first tranche, BII invested Rs 1,200 crore in MEAL. In addition to BII, Mahindra's electric vehicle division is also owned by Temasek, an investment firm based in Singapore. Temasek declared in 2023 that it will invest Rs 1,200 crore in MEAL for a 1.5–3% share in the business.

The BE 6 and XEV 9e, M&M's first lineup of Born Electric SUVs, were introduced in November. They start at Rs 18.9 lakh and Rs 21.9 lakh (ex-showroom), respectively. Deliveries to the two models, which are based on the INGLO (Intelligent Electric Global) architecture, are anticipated to begin in late February or early March.

The Born Electric portfolio is an element of M&M's overall plan to become a major force in the EV industry. By 2027, the business had previously stated that it expected EV penetration to reach 20–30%. A Rs 12,000 crore investment in M&M's electric company MEAL over the following three years was also approved by the board at the beginning of this fiscal year.