BENGALURU - Indian automaker Mahindra and Mahindra Ltd. said on Wednesday it would invest 100 billion rupees ($1.21 billion) to set up an electric vehicle (EV) manufacturing plant near the western city of Pune, about 90 miles Southeast of Mumbai.
The Mumbai-headquartered conglomerate said the investment, for which it has received approval from the Maharashtra state government, would be spread over a 7-8 year period.
Known for its sports utility vehicles (SUVs) and jeeps, Mahindra will manufacture its upcoming Born Electric Vehicles (BEVs) range that includes the EV variant of its popular SUV, the XUV 700, at the new plant.
India's car market is tiny compared to its population and EVs make up just 1 percent of the total annual car sales of about 3 million, but the government wants to grow this to 30 percent by 2030.
The new plant will help Mahindra take on domestic rival Tata Motors, which dominates India's EV market with electric models of its Nexon SUV and Tigor hatchback. In August, Tata bought a former Ford Motor plant in the western state of Gujarat after the U.S. automaker exited the domestic market.
Tata's EV unit, in which private equity firm TPG has an investment, is valued at $9 billion.
The tech-to-tractors Mahindra Group is in talks with global investors to raise between $250 million and $500 million for its new EV unit which was also valued at $9 billion in July after its first raise from British International Investment (BII).
Mahindra's first electric SUV is expected to go on sale in January. The carmaker in August deepened its ties with Volkswagen Group, under which the German carmaker will supply electric components.
Mahindra's new plant will be in one of India's oldest auto manufacturing hubs, home to companies including Volkswagen and Mercedes-Benz, as well as Bajaj Auto and Hero MotoCorp.