'EV penetration to hit 50% in next 5-7 years': Mahindra Group CEO Anish Shah

Electric vehicles are expected to account for 50% of new car sales in the next five to seven years, according to Mahindra Group managing director and CEO Anish Shah.

“I would expect EVs to go north of 50% in the next five to seven years. And the reason for that is it's a much better car to drive... It's not that someone should buy an EV because it is something that helps us with oil or something that has a lower cost of operation. It starts with a consumer looking at EVs and saying, I love driving this car. That's what a Tesla did when it came in the first time,” Shah said in a fireside chat at the Business Today MindRush & India’s Best CEOs Awards.

Shah’s bullish forecast on EVs comes at a time when Mahindra & Mahindra is set to emerge as the second-largest electric vehicle manufacturer in March, pulling ahead of JSW MG Motor India. To be clear, M&M is already the biggest EV maker in revenue terms.

“Today, EVs have 500 kilometers real life range, with the ability to add 100 kilometers in five minutes at a charging station,” Shah said, adding that EVs are now priced on par with internal-combustion (ICE) vehicles.

Shah, however, acknowledged that building charging stations everywhere will take a couple of years. “The government is very keen on driving that right now. That will really change the game for electric cars,” he added.

As the ongoing West Asia crisis leads to higher crude oil prices, Shah batted for faster electrification. “In the current crisis, one of the biggest challenges is Atmanirbharta for oil, and the only solution to that is to use less of it, and on a lighter note, on a bias as well, more electric cars,” he said.

On the impact of the West Asia war and the subsequent energy disruption on Indian industry, Shah said, “So far, it's under control, and I would give a lot of credit to the government for this, because they've acted very quickly. We're aware of a number of deliberations they have had, and the ability to bring in more ships, the ability to allocate LPG very quickly, and a number of other decisions have helped keep things stable at this stage. We are not seeing any impact on demand. We are not seeing any impact on production either,” he explained.

The Mahindra Group CEO, however, cautioned that the industry needs to be prepared if the war continues much longer. “If the Strait of farmers continues to be closed, and we don't get the ships that we need to, then there could be a greater impact. But at this point in time, yes, there's been a lot of scrambling. Our teams have to do a lot of work that they've had to do to address various issues, including tracking LPG availability for 400 suppliers every morning,” he said.

While automakers are not seeing any direct impact as yet, Shah said everyone is gearing up for the worst. “A lot will depend on how long the war lasts and the free movement of ships that comes in. If that continues to happen, then I think we will be fine. If that doesn't happen, then we would have to gear up for some trouble along the way,” he added.

“At this point, at least our raw material, our finished goods inventory, is fairly reasonable as well. For auto, it's a little lower because demand has been very high, and that has been continued to be high for us for the last few years,” Shah said.