Mahindra is working overtime to secure its supply base – especially the imported battery cells – as it has plans to launch five electric models in the next three years.

1. Mahindra struggled to procure batteries for XUV400
2. BYD will supply 60kWh and 80kWh cells at launch
3. Maruti YY8 to also use BYD's blade cells

Exactly a year ago, Mahindra tied up with Volkswagen to source EV components like battery cells and electric motors for its upcoming INGLO-based SUVs. But this has run into delays, and people in the know say that critical parts from VW's MEB architecture may not come before 2026-27. Meanwhile, Mahindra’s first born EV – the .e8 – is due by late 2024.

Mahindra had multiple options

Sources say that Mahindra also explored several other battery suppliers soon after its deal with VW, just to have a broader supply base and ensure there are no disruptions in supply as it had witnessed post COVID-19.

The homegrown automaker has already struggled with battery supplies for the XUV400, which uses pouch cells from LG Chem with a Nickel-Manganese-Cobalt (NMC) 532 cathode. However, the Korean battery supplier discontinued the 532 chemistry, and was unable to supply battery cells to Mahindra in the required quantity, which was also the reason for the XUV400’s delayed launch. However, Mahindra has since managed to secure a continuous supply of batteries for the XUV400 from Chinese battery maker Farasis, which makes cells with a similar chemistry and construction as the ones from LG Chem.

While Farasis will supply batteries ranging from 32kWh to 40kWh for the XUV400, we have now learnt that BYD will be supplying 60kWh and 80kWh batteries for the upcoming ‘Born Electric' models. Mahindra has also secured the electric motor from French component supplier Valeo, which will be used in the .e8.

Why the delay in using VW parts?

Sources reveal that dealing with VW was more challenging than Mahindra anticipated, with lots of paperwork involved in dealing with IPR, legal and compliance issues. But since the agreement with VW was non-exclusive, Mahindra had been in talks with BYD parallelly.

The ‘Born Electric’ range was conceived with two battery sizes – 60kWh and 80kWh – both with LFP technology. VW was to supply the 60kWh pack, while BYD was to supply the bigger pack. The reason why Mahindra went to BYD for the larger battery pack is because VW could not give an 80kWh option, which the former could with its blade cell technology.

However, due to delays on VW’s part, BYD will be supplying both the 60kWh and 80kWh battery packs right from launch, until VW is ready with its next-generation ‘unified’ cell technology that uses LFP chemistry. The unified cell design has several advantages over the previous LFP cells. It is a larger cell, which allows for higher energy density and improved thermal management, which results in longer range and faster charging times. Also, the unified cells are more scalable and flexible, and can be adapted to different vehicle sizes with different power requirements. 

BYD’s blade cell technology will also be in the Maruti YY8 that’s due around the same time. Given the current political stand-off with China, BYD has no plans for cell manufacturing in India, which means in the short term, the cells will be imported from China. 

Mahindra has already committed over Rs 10,000 crore in the EV business, and has secured interest from private equity investors like Temasek and British International Investment.