State-owned Energy Efficiency Services Ltd. (EESL) issued a tender to supply 500 electric vehicles to the government in the first phase. Tata Motors and Mahindra & Mahindra are the only two companies selected to supply the electric cars.
Tata Motors will supply electric cars for Rs 11.2 lakh, which is inclusive of Goods and Service Tax (GST) and a comprehensive 5-year warranty. Mahindra matched the bid as well and will supply 150 of the total 500 electric cars.
Currently, the cost of Mahindra's electric vehicle, the e-Verito, is over Rs 2 lakh more compared to Tata Tigor Electric vehicle. The company is looking at cost-saving measures to be competitive and not incur losses.
Mahindra will bring down the driving range of the e-Verito as the required range in the tender is much lower than the 140km driving range of the e-Verito. Also, the company is looking at cutting down on the features of the e-Verito as well.
The company will supply not more than 150 e-Veritos to EESL in the first phase as it could incur losses if it goes beyond that. In the second phase, the order is for 9500 electric cars, which will be issued upon completion of deliveries of the 500 EVs in the first phase.
To be competitive and to supply EVs in the second phase, Mahindra needs to cut several features to position the e-Verito as a viable option and not incur losses.
"One area that we have potentially identified is that the range we have designed our vehicles for is more than what is required in the tender," M&M Managing Director Pawan Goenka told PTI.
He also ruled out cutting down the length of the Mahindra e-Verito as this could take away the comfort of the customer. "It doesn't happen overnight, and by doing so, we will be taking away the comfort of the customer. So, it is not going to happen," Goenka noted.
For Mahindra, cutting down the features like the driving range of the e-Verito would help not lose money. While EV manufacturers are working towards increasing the driving range of the vehicle, cutting down the range would lead to disruption in the advancement of electric vehicle technology.