Mahindra & Mahindra (M&M) is banking on the electrification of its portfolio to stay ahead of tightening efficiency and emissions regulations, even as it fine-tunes its internal combustion engine (ICE) portfolio and expands customer choice across segments.
As India prepares for the next phase of Corporate Average Fuel Efficiency norms, which will impose stricter CO₂ limits from April 2027, the automaker believes that electric vehicles will play a pivotal role in ensuring compliance.
“EVs are critical for us, not just from a demand perspective but also from a compliance perspective,” said Nalinikanth Gollagunta, CEO of M&M’s Automotive Division and Executive Director of Mahindra Electric Automobile Ltd. “We already have more than 8 percent EV penetration today, and if that moves into the high teens, we should be within the shooting range of what CAFE requires.”
The Bureau of Energy Efficiency’s draft CAFE 3 norms, released in September, propose tighter average CO₂ limits while easing requirements for sub-4-metre petrol cars. The proposal seeks to incentivise electric vehicles and range-extender hybrid electric (REE) vehicles in the same way, while there are incentives for plug-in hybrid, strong hybrid and flex fuel vehicles.
While M&M is awaiting final clarity on CAFE norms, Gollagunta said, “Our sense is with the (EV) products that we have put out already and the NU-IQ (platform) which is coming in, it should hold us in good stead for CAFE.”
The company would continue with its multi-powertrain approach. “Our philosophy is simple: we’ll offer multiple powertrain and transmission options and let customers decide. We don’t want to force choices on them,” he said.
In the electric vehicle category Mahindra currently offers BE6, XEV 9e and XUV 400. In September, it dispatched 3,187 e-SUVs to customers, down 14% MoM (August 2025: 3,699 units). This performance gives M&M a 21% market share for last month.
Clear Priorities on Technology Bets
While some automakers are exploring hybrids as a bridge technology, Mahindra is keeping its focus firmly on EVs.
“We are very clear that the end state is EV, and that’s where we’re placing all our bets,” Gollagunta said. “Hybrids are another option, just like diesel is an option. They give higher fuel efficiency at a premium, but they aren’t zero-emission. They don’t solve for what the government is solving strategically–the Paris Accord, the fuel import bill, and the export push.”
According to Gollagunta, EVs align better with India’s long-term strategic goals of reducing emissions, lowering oil imports, and building export-oriented automotive brands. “If you see all three imperatives, EVs fit perfectly. That’s why our focus remains there,” he added.
That said, Mahindra isn’t ruling out CNG or Hybrid technologies completely. “If the regulatory environment continues to be in a certain place where hybrid is a piece of the market, then of course as a strategic choice we can look at it. Similarly, CNG is a strategic choice we can look at,” he said.
“As an OEM we can’t say that nothing is an option we won’t look at. At this point in time we are focused on EVs but we’ll continue to read the market and see how it plays out,” he added.
On why Mahindra has not yet introduced CNG-powered vehicles, Gollagunta said, “One of our core brand pillars is ‘power on tap.’ The current CNG technology doesn’t lend itself well to that attribute. However, that doesn’t mean there won’t be future advancements in CNG systems that can deliver the kind of performance our customers expect. We’ll continue to evaluate the technology, and if we find a solution that aligns with Mahindra’s performance DNA, we’ll definitely consider CNG at that point.”
GST 2.0 Impact
The recent GST 2.0 reforms, which lowered rates on entry-level ICE vehicles, have sparked debate about whether they could slow EV adoption. Gollagunta, however, dismissed those concerns, saying EV buyers operate on different purchase triggers.
“Most of our EV customers don’t walk in calculating running costs. They see the vehicle, love it, and then rationalise that it’s electric,” he said. “Around 60 percent of our EV sales already come from states where on-road pricing is at parity with ICE. GST might change things at the margins, but we’re already there.”
Mahindra’s electric portfolio, led by BE6, XEV 9e and XUV400, has been seeing monthly volumes of 4,000–5,000 units, and the broader market is showing strong traction. “EVs are becoming a mainstream choice. Industry-wide, we’ve seen almost 100 percent year-on-year growth in September. The segment is expanding rapidly, not contracting.”
He added that Mahindra’s focus has been on reducing barriers to adoption, addressing customer concerns around range, resale, and reliability. “Our 79kWh battery gives 450-480 km real-world range. With lifetime battery warranties, we’ve taken away the anxiety around replacement. These are vehicles people aspire to own,” he said.
Bolero Refresh
Mahindra’s commitment to giving customers “choice” extends to its ICE lineup as well. On October 6, the company refreshed the Bolero and Bolero Neo, introducing new features, improved interiors, and revised pricing.
The 2025 Bolero B4 now starts at ₹7.99 lakh (down from ₹8.79 lakh), while the Bolero Neo V8 begins at ₹8.49 lakh (ex-showroom). The updates include new range-topping variants that modernise the lineup without diluting its rugged, rural-friendly appeal.
When asked whether the new Bolero could cannibalise sales of the XUV 3XO, which starts at ₹7.28 lakh (ex-showroom), or the entry-level Thar priced from ₹9.99 lakh, Gollagunta remained unfazed.
“We don’t worry about cross-consideration. We want to give customers a choice, whether between Bolero and 3XO or between diesel and petrol,” he said. “Some overlap will happen, but that’s for the customer to decide. Our job is to ensure every product delivers on its core promise.”