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Mahindra makes key electric vehicle move

It's a deal: Mahindra and Reva excutives shake on a deal for the Indian motor manufacturer to take a majority stake in the electric car company.

Mahindra takes control of Indo-US EV firm Reva, and is set to bid for SsangYong

4 Jun 2010

INDIA’S Mahindra & Mahindra has made a fresh move to expand its stable beyond SUVs and utilitarian vehicles, buying a majority stake in the Reva Electric Car Company and announcing its intention to become a “strong global player in the electric vehicle space”.

The Reva purchase, under which Mahindra takes a 55.2 per cent stake in Reva (to be renamed Mahindra Reva Electric Vehicle Co), comes as the Indian auto manufacturer this week also confirmed its intent to bid for the troubled SsangYong Motor.

Mahindra has joined seven companies worldwide in preparing an offer for SsangYong, including Nissan and Renault (with South Korean partner Samsung), and will now do due diligence over the next six weeks to determine if it will submit a binding bid before the July 20 deadline.

SsangYong has been under court-ordered bankruptcy protection since early 2009, with a preferred bidder for the company to be announced in August.

Mahindra has declined to put a dollar figure on a potential deal with SsangYong – said to be worth between $300 and $500 million – and likewise has not disclosed the value of the deal with Reva, although in a statement it said that its majority stake in the Bangalore-based EV firm came from purchasing equity from the promoters and providing 450 million rupees ($A11.4m) in fresh equity.

Mahindra said it would adapt Reva’s EV technology for a range of its vehicles, including an electric version of its Maxximo mini-truck already in development.

It is unclear whether its first foray into passenger cars, the Renault-sourced Mahindra Logan, will also gain an electric powertrain.

 center imageLeft: Reva NXR. Below: Reva NXG concept.

Under its ‘sustainable mobility’ program, Mahindra says it has been working on green technologies for the past 10 years. It has developed a diesel-electric hybrid version of its Scorpio SUV and an electric three-wheeler, and has introduced Bosch-developed “micro hybrid” (idle-stop) technology on a range of vehicles in India.

Reva was formed in 1994 as a joint venture between India’s Miani Group and US firm AEV and has become a leading player in low-cost EVs, with more than 3500 EVs on the road across 24 countries including Europe, the UK, Asia and South America.

GoAuto understands that Australian importer Adrian Ferraretto, who also runs the Adelaide-based Solar Shop Australia, been attempting to achieve Australian homologation for a two-door Reva micro-EV for the past five years, without success.

Evaluations are continuing, according to Reva’s Australian website.

Under the new Mahindra Reva organisation, the Miani Group will hold a 31 per cent share and AEV will hold 11 per cent.

Reva has also been working with General Motors to develop a plug-in version of its Chevrolet Spark mini-car – the new-generation version of which will be sold in Australia (in conventional form) as the Holden Barina Spark later this year.

However, GM, which unveiled the Reva-powered Chevrolet e-Spark at the Delhi motor show in January, is believed to have since pulled out of the partnership following Reva’s deal with Mahindra.

Mahindra Reva’s chief of technology and strategy, Chetan Maini, said that as a result of Mahindra’s investment, Reva will be now able to “scale, innovate and accelerate and so to deliver better products to more customers in more places”.

“The EV market is poised to grow significantly and we concluded that in order to seize the opportunity we needed the resources and experience of a major automotive manufacturer,” he said.

“In Mahindra we have found a company that not only shares our vision of principled and sustainable growth but one that also has a reputation for good corporate governance.”

Mahindra president (automotive) and newly elected chairman of Mahindra Reva, Pawan Goenka, described the deal was a “key strategic acquisition for Mahindra in its march towards sustainable mobility”.

“Mahindra and Reva bring together complementary strengths,” he said. “With Mahindra’s vehicle engineering expertise, global distribution network, sourcing clout and financing support, Reva’s vehicles have the potential to significantly gain in market penetration.

“Mahindra will also benefit from Reva’s EV technology for its own products.”

Dr Goenka told journalists at the announcement that he expected India to produce 80,000 to 100,000 EVs by the year 2020, with global sales projected at 1.5 to two million cars.

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