Mahindra E20 Plus Electric Vehicle
The car manufacturer has bought a 55% stake in Meru cabs, with an option to purchase the rest of the company.
Meru primarily offers ride-hailing and radio taxi services. It is also a major player in fleet rental to big corporate clients.
India is the world’s fourth-largest car market and is poised to overtake Japan by 2021. This will make it number three behind China and the USA. However, Indian car sales have declined alarmingly each of the last ten months and there seems to be no immediate prospect of the trend reversing. China, the world’s biggest market, has also seen a decline in sales for the first time in decades.
In India, global trade tensions, instability in the non-banking car-finance sector and the jump to much higher, and more expensive, emission standards have all contributed to this slide in sales. Other factors include bad urban congestion and the burgeoning shared mobility market.
Shared mobility in India is huge and very diverse. The shared mobility sector comprises car-sharing, ride-hailing, bike-sharing, micro-transit and scooter-sharing.
Two out of three salaried middle-income workers now consider ride-hailing more economical than owning a car and use such services at least once a week. Most of these trips are between 10 and 20km in distance. Ironically, these middle-income workers are who the car manufacturers depend on for sales.
Meru, as primarily a taxi operator, was on the market because it was under pressure by the severe disruption of ride-hailing services like Uber and local giant Ola. It is still a significant player in shared mobility though.
Mahindra’s urgent move to boost revenue has shifted resources from electric vehicle development in the short term. The EV market has not grown as much as expected, in spite of major incentives offered by the Indian government. However, the urgent need to reduce urban air pollution will keep EVs top of mind. Mahindra currently sells the e2o and eVerito EVs in India and will most likely launch electric versions of the popular Mahindra KUV100 and Mahindra XUV300. It is also in partnership with Ford to develop the Aspire EV.
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