Mahindra has unveiled its first dedicated EV and battery production facility in Chakan, India. Situated within its larger Chakan manufacturing hub, this facility will serve as the core of Mahindra’s EV expansion both in India and globally. This news comes as India’s EV market grew over 22% in 2024.

A dedicated Mahindra facility

Mahindra’s Chakan facility will serve as the production hub for its two flagship EV models, the BE 6 and XEV 9e. Currently, the plant has an annual production capacity of 90,000 EVs, though this is unlikely to be fully utilised initially as production ramps up to match growing demand. The company has not disclosed the annual capacity of the attached battery manufacturing unit.

Mahindra has allocated INR4,500 crores (USD540 million) to develop the facility. The company described the hub as “a fully integrated, highly automated manufacturing ecosystem,” featuring over 1,000 robots and multiple automated transfer systems.

In the long term, the facility is expected to achieve an annual production capacity of 200,000 vehicles as Mahindra expands its EV lineup. By the end of 2026, the company plans to launch five new EVs, aiming to strengthen its presence in the European market.

Key read: Over 17 million EVs sold in 2024 – Record Year 

Mahindra’s announcement in the context of India’s EV market

Mahindra, India’s third-largest automaker, sold over 500,000 vehicles in 2024. It also ranks as the country’s third-largest EV supplier, following Tata Group and SAIC, accounting for 7% of the Indian EV market.

With EV sales in India growing at an annual rate of 22% in 2024, Mahindra has kept pace, recording a 59% increase in its own EV sales over the same period. While India’s electric passenger vehicle market remains relatively small compared to other countries, demand is accelerating, with the government aiming to achieve 30% EV sales penetration by 2030.

Key read: US takes further steps to cut China from its EV market supply chain

Indian EV production incentives

In March 2024, the Indian government introduced an incentive scheme aimed at encouraging foreign automakers to establish local EV production facilities. While the initiative was primarily designed to attract Tesla, the company has since shelved its plans. However, other manufacturers, including Kia, Hyundai, and Toyota, have expressed interest in setting up EV production plants in India. Meanwhile, VinFast began construction of its EV factory in Tamil Nadu in 2024.

The future of India’s EV market

India’s EV market is heavily focused on 2/3 wheelers, with 3-wheeler EV sale penetration already at 50%. However, in the larger vehicle market, penetration is much lower. The Indian government is supporting sales growth through its FAME II and PM E-Drive schemes; however, India’s EV sales are hindered by heavy import tariffs. Fully built EVs imported into India currently face duties ranging from 70% to 100%. Having domestic production capabilities will be key to growing India’s future EV market.   

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