Rajesh Jejurikar, Executive Director CEO, Farm and Auto segments, Mahindra & Mahindra, said that the price increase of electric three-wheelers would not affect demand.
Speaking at the at the company’s Q4 and FY24 results meeting in Mumbai, Jejurikar explained that even at the slightly enhanced prices that they have taken, they have seen the impact that it will have on the per month EMI of the customer.
“That payback is very few months. So we don’t see that minor increase in price or EMI that we have taken, affecting demand at all. We have made that correction, and demand continues to be robust, so really, we are not worried about that,” he added.
He explained that despite a Rs 15,000 price increase due to the transition from the government’s FAME2 to the new Electric Mobility Promotion Scheme (EMPS), demand for electric three-wheelers remains strong, aided by a low total cost of ownership.
After the Indian government halved subsidies for electric three-wheelers and two-wheelers, many electric three-wheeler manufacturers were forced to raise prices because the current EMPS scheme now provides up to Rs 25,000 in support for e-rickshaws, as opposed to Rs 50,000 in subsidies under the FAME 2 scheme.
The EMPS scheme has reduced subsidies for small cargo and passengers to Rs 50,000, down from Rs 95,000 in the previous FAME scheme.
Mahindra & Mahindra confirmed revising its electric three-wheeler prices like other electric three-wheeler industry players in response to the government halving subsidies transitioning from the FAME 2 scheme to the current EMPS scheme.
When asked if the entry of new players and the combined price increase could slow growth in FY25 he said that demand continues to be strong.
On unlocking the benefits of the PLI scheme for Auto, the company has already got all the eligibility certifications and M&M hopes to start benefiting from these incentives during the current fiscal year.
A senior company official said that this would help offset the reduction in government support for electric three-wheelers, under the new EMPS scheme with the long-term prospects for electric mobility continuing to remain strong backed by robust demand coming in from various e-commerce players.
The official also said Mahindra & Mahindra, as part of its electric three-wheeler business, is also looking to continuously scale up its dealer network by adding 40 LMM exclusive dealerships, according to a senior company official discussing the company’s network expansion strategy to increase its penetration in the electric three-wheeler market.