Electric vehicles sector soon to make money, no need for subsidies: M&M
India’s only EV manufacturer, Mahindra and Mahindra, said that the emerging EV sector had potential to bring in profit.
Mahindra Group has started getting a sense that the electric vehicle (EV) business has reached a “tipping point” and would be making a profit. The automaker thinks the business would not require government subsidies to thrive, Bloomberg reported.
India’s only EV manufacturer, Mahindra and Mahindra, said that the emerging EV sector had potential to bring in profit. Some carmakers cautioned that EV was curbing their margins, said Mahindra chairman Anand Mahindra while speaking at the Bloomberg Global Business Forum in New York.
Mahindra and Ford have recently signed an agreement to collaborate on EV development and platform sharing.
Mahindra called sustainable businesses the “single biggest business opportunity for the next couple of decades,” as per the Bloomberg report. He also added that whoever did not take up this opportunity, would miss out on growth.
The Mahindra group had acquired Reva Electric Car Company from its founder Chetan Maini in 2010. The company’s EV division, Mahindra Electric Mobility, currently has three fully electric vehicles — e2o, eVerito, and eSupro.
Though the global demand for electric cars has not been growing substantially, hindered by high prices, some big automakers are planning to shed off their solely fossil fuel-ran cars in near future. Volvo has announced this year that its fleet would only have electric or hybrid cars from 2019 onward.
Countries like China, United Kingdom and France are also mulling plans to push for clean and greener technology and ban petrol and diesel cars in next few decades. Even India is not too far behind, with the erstwhile power minister Piyush Goyal declaring that the country, listed among one of world’s most polluted, would stop selling petrol and diesel cars by 2030.
Bloomberg New Energy Finance had projected in July this year that in the coming years, things would change and prices would reach parity, resulting in about a third of the world’s auto fleet would be plug-in hybrid or battery-powered by 2040, the report said.
Auto-manufacturers like Tesla Inc. is already coming out with its first mass-market electric car with a plan to catalyze the much-needed transition from a carbon-powered economy to a solar and electric-powered one. Big players like Nissan and BMW have jumped on the EV bandwagon.
As green business ventures have started to pay off, companies do not need government subsidies for expansion into sustainable sectors, Mahindra said.
However, as PM Narendra Modi has done regarding India’s drive towards clean energy and solar power, governments can garner support to green businesses by laying out the direction their countries are taking with regard to the power sector, the company’s chairman said. He called the withdrawal of US from the Paris climate agreement “unfortunate”.
But outlining the extent of Government support, Mahindra said, the decision to invest in green businesses ultimately lay with companies.
Source: moneycontrol
