Mahindra and Volkswagen have signed an agreement to explore the use of components from VW’s MEB modular electric car platform in Mahindra’s upcoming born electric vehicles. This is the latest of many recent partnerships in the auto industry, where multiple carmakers join forces to share development costs, platforms, components or technology, to make building and selling EVs a viable business model.
- VW’s MEB platform underpins ID family of EVs among several others
- Mahindra’s Born Electric Platform to preview three concept SUVs this July
- Current agreement is simply to evaluate scope of collaboration
Volkswagen-Mahindra partnership: what’s in the agreement?
The agreement, for now, is only for an “evaluation of the scope of collaboration”, and as such, no definite plans have been laid down. Mahindra is looking to use MEB components such as the electric motors, battery management system and battery cells for its Born Electric Platform, and the partnership is going to explore the viability of this.
“Mahindra is a pioneer in the electric mobility space in India and a great partner for our MEB Electric Platform,” said Thomas Schmall, Volkswagen Group Board of Management member for Technology and CEO of Volkswagen Group Components.
The agreement has currently laid down the “binding rules for the evaluation phase, as well as the non-binding scope of supply”. Both brands are expecting to finalise a binding supply agreement by the end of 2022.
What does this mean for Mahindra?
Mahindra will be showing three new concept SUVs this July that will eventually be built on its bespoke Born Electric Platform. While previous teasers have hinted at the body styles of these upcoming SUVs, no technical details have been revealed so far. These SUVs are slated to come into production from 2025 onwards.
The Volkswagen MEB platform, meanwhile, has been in production for a few years already, and underpins EVs from several VW Group brands, like Audi, Skoda and Seat, and soon also by Ford, which ironically was the last global carmaker Mahindra tried to partner with in India. The fact that these MEB cars, and their components that Mahindra seeks to use, have already been tried and tested will be a huge benefit for M&M.
“We are very pleased to have Volkswagen as a strategic partner in achieving our ambitious Born Electric Vison,” said Rajesh Jejurikar, executive director, Auto and Farm Sectors, Mahindra & Mahindra. “The complementarity of their extensive technology, innovation, and vertical integration in supply chains, will provide a framework to develop our next-gen Born Electric Platform.”
Moreover, VW’s MEB was designed from the outset as an ‘open’ vehicle platform, which means, much like open-source software, it was always intended for use by other manufacturers. As such, it is scalable and very flexible for use in a variety of applications, even allowing for different battery sizes and motors on both axles, which means Mahindra can benefit from a wide range of powertrain configurations.
Mahindra was, of course, the pioneer of the EV space in India, but lately, has lost ground to rival Tata Motors, which quickly dominated this segment. Mahindra has previously stated that it is open to all sorts of collaboration for the development of EVs – including capital and technical expertise – and this partnership with VW is the first step in that direction and could potentially help the homegrown carmaker make up that lost ground.
What does this mean for Volkswagen?
The biggest challenge with EVs is their cost, particularly of the batteries, and economies of scale is the only way to overcome that. VW has hinted that it intends to join the EV fray in India with its ID.4 crossover, which is based on the MEB platform. Moreover, the German brand is working on a low-cost, front-wheel-drive version of the MEB platform for developing markets, but even when that does arrive, greater economies of scale is only going to help balance out the costs and turn a greater profit.
“It’s another proof point that the MEB is both technologically state of the art and highly competitive in terms of cost,” Schmall said. “Together with Mahindra, we want to contribute significantly to the electrification of India.”
India is a key market then, with huge growth potential and EVs still in their infancy. Tying up with a home-grown carmaker will bring them the volumes, even if at a supplier level, which is crucial for every carmaker in the EV race. Think of it as what Fiat did when it supplied its venerable 1.3 Multijet diesel to several carmakers in India, including market leader Maruti Suzuki.
It is, however, important to note that these are still early days, and it remains to be seen what finally comes out of this partnership. While we will only know the finer minutiae of the agreement by the end of 2022, should it all come to fruition, it will mean more high-quality, mass-market EVs for Indian buyers.
Do you think this agreement will lead to better EVs for Indian customers? Let us know in the comments below.
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