Mahindra stops selling electric cars in UK – what makes electric cars so hard to sell in India?

There is no doubt that we need electric cars and greener transportation but the development of Mahindra in the UK is a reminder that businesses need volumes and money to thrive.

By: | Updated: May 3, 2017 5:30 PM

In what can be termed as a major setback to Mahindra & Mahindra's vision of expanding its electric vehicle sales, the company has stopped selling electric cars in the UK market, claims a Reuters report. In addition, Mahindra UK as a company too is in the process of winding its operations within an undisclosed period of time. The development comes in less than a year of launching the e2o electric car in the market. Although the company considered the UK and many European markets positive for adopting electric vehicle technology, sales have been far too low.

The Reuters report quotes an official reply to a potential UK customer, wherein the reason for stopping sales and winding up operations has been attributed to sale not being able to match the level required to maintain an ongoing investment to run operations. Sales of Mahindra electric vehicles have been ceased with immediate effect so it's not known if there are any remaining stocks or if the last few units were sold at discounted prices.

An unnamed company spokesperson told Reuters that the company will reconsider the UK market at an opportune time. The spokesperson also stated that the company is now focusing on the Indian market as it considers India to be well-poised for a take-off in the electric vehicle segment.

The Problem Areas

While Mahindra likes to consider India to be 'well-poised' for a growth in the EV segment, the challenges here are far more intense than those in the UK or other European markets. With a government policy that desires to increase adoption of electric vehicles but hasn't been able to figure out yet how to do that, it's hard to think how customers will suddenly start warming up to the idea of an EV.

Talking about the technology itself, the e2o (in India we have the e2o Plus) is a good car but there is hardly any support mechanism for such vehicles yet in the country. While the idea of having more electric vehicle sounds cool, the reality is India needs to put in a tremendous amount of work on the infrastructure, scrappage policy and incentivisation fronts to even make customers start thinking about buying an EV. We need charging infrastructure on urban roads, parking lots, corporate buildings and large public centres. And I haven't even got into the problems of coal-generated electricity, range anxiety and the high cost of an EV from an Indian perspective.

There is no doubt that we need electric cars and greener transportation but the development of Mahindra in the UK is a reminder that businesses need volumes and money to thrive. India is only a much tougher market to penetrate with hazy and inadequate Government policies on electric vehicles. Also, let's not just dump all the blame on the Government alone coz there's only so much they can do in a country of more than a billion.

Let's just accept it that in India if a vehicle isn't desirable, it most likely will not sell in good volumes. The Nano is a great car but it never was desirable and what followed its launch is something we all are aware of. Mahindra needs to make its electric vehicles more desirable to increase their sales in India. With that taken care of, it becomes easier to imagine the 'take-off' that many industry stakeholders have been expecting for years.