Volkswagen will supply Mahindra electric car parts from its MEB (Modular Electric Drive Matrix) platform, and both companies have signed a term sheet. While the term sheet lists out the commercial and technical terms along with a possibility of local battery manufacturing, the actual agreement between the two companies is expected to be signed by the end of 2022.
Volkswagen is expected to supply parts that will go into no less than a million Mahindra electric vehicles. Mahindra is planning to launch 5 new electric vehicles starting 2024, and has already put together a new platform called INGLO for its new range of electric SUVs. Apart from supplying Mahindra with parts from the MEB platform, Volkswagen is also exploring a strategic alliance with the Indian utility vehicle giant.
The strategic alliance could go much beyond parts supply. Some of the areas that Mahindra and Volkswagen are considering in the strategic alliance include local manufacturing of battery cells, new vehicle projects, and charging and energy infrastructure development. While Mahindra already has a presence in India’s electric vehicle market, Volkswagen has yet to introduce an electric vehicle here.
Globally, Volkswagen is betting big on electric vehicles and is tipped as one of Tesla’s most formidable rivals thanks to the MEB platform and the manufacturing depth that the German automaker has. Mahindra and Volkswagen coming together in India could result in exciting new electric vehicles for buyers here.
In the backdrop of the term sheet signing, here’s what Thomas Schmall, Volkswagen Group Board of Management member for Technology and CEO of Volkswagen Group Components, said:
We are happy that we have identified a larger scope of collaboration between our two companies. Together, Volkswagen and Mahindra can contribute significantly to the electrification of India, a huge automotive market with ambitious climate protection commitments. The MEB Electric Platform and its components are key to affordable sustainable mobility around the globe. The partnership not only demonstrates that our platform business is highly competitive, but also that the MEB is well on track to become one of the leading open platforms for e-mobility. We are thus delivering on the focus of our Volkswagen NEW AUTO strategy to make the platform business a strong pillar of our Group and to unlock future profit pools through economies of scale.
Rajesh Jejurikar, Executive Director, Auto and Farm Sectors, Mahindra & Mahindra Ltd., stated:
The signing of the techno-commercial term sheet is a significant step forward in our partnership with Volkswagen. Our purpose-built INGLO platform offers unmatched potential for growth and further customization for developing new and innovative products, not just for India, but for global markets. Our vision is to lead the electric mobility revolution in India by bringing authentic electric SUVs with cutting-edge technology, as showcased in the UK today. We are very pleased to explore further areas of potential collaboration with Volkswagen and are confident that together, we will be able to shape an exciting electric future.