Taking a cue from the recent NITI Aayog report which set a target to achieve 100 per cent electric fleet in India by 2032, Mahindra & Mahindra said it has started ramping up capacity multifold and is looking to launch higher-end electric vehicles.

M&M, which is the only manufacturer of electric cars in India, currently has a capacity to make 400-500 electric vehicles a month, but the capacity is highly underutilised as the company is not able to sell even 100 vehicles a month, given the limited driving range of the vehicles and high costs attached.

In anticipation of increased demand with government support, M&M said it will double this capacity by the end of this year and start a new factory in Chakan, Maharashtra to further increase the capacity to 5,000 vehicles a month in two years’ time.

“There is a viability gap in electric vehicles at the moment. If we are able to reduce our costs by 20-25 per cent, then we can also reduce the cost of the vehicles, making them more affordable and if not cheaper then on par with petrol or diesel vehicles,” Pawan Goenka, Managing Director, M&M, said.

A low GST rate of 12 per cent on electric cars, combined with incentives under the government’s FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) scheme and the Centre’s plan to set up 1,000 charging stations in the country by the end of the fiscal are enough incentives to kickstart growth in electric vehicle sales, Goenka said.

The government is offering subsidies on electric and hybrid vehicles of up to ₹1.38 lakh for cars under FAME India Scheme and wants to see 6 million electric and hybrid vehicles on the roads by 2020 under the National Electric Mobility Mission Plan 2020 and FAME.

To make EVs further attractive to customers, Goenka said the company is working on high-end electric powertrain technology, which will allow cars to run for 200-300 km with single charge from the existing range of 100-140 km, and enhanced comfort features in its cars. The technology being developed is in partnership with M&M’s South Korean subsidiary Ssangyong Motors, which plans to roll out an electric SUV by 2020. Goenka said M&M would also consider launching an electric SUV using the same platform. A luxury electric sedan could also come from M&M’s stable, which would target international markets and developed in partnership with Pininfarina, the Italian car design company, which designed many Ferrari cars and was acquired by Mahindra in 2015.

“Once we are able to achieve a drive range of over 200 km, we would be able to make electric vehicles viable for commercial fleet operators. Currently, we are giving them financial incentives to use electric vehicles in their fleet,” Goenka said.

M&M’s e20 mini car and e-Verito are already being used by fleet operator Lithium in New Delhi and Bengaluru. Apart from this, Big Basket uses some of these cars in its internal fleet. M&M is also in talks with about six different fleet operators and taxi aggregators to launch an all-electric fleet of cars.