There is no doubt that the deal between the country?s top SUV maker Mahindra & Mahindra and electric vehicle (EV) manufacturer Reva would be beneficial for both. While Reva can access newer markets through the M&M?s wide business network, its technology would be useful for M&M.

Bangalore-based Reva has a presence in 24 countries, but has sold only 3,500 cars since its first vehicle launch in 2001, falling well below expectations. Half of its sales happened in the overseas market, primarily the UK. The car was not a big hit in India due to its high cost, poor infrastructure for charging points and inadequate government support for EVs in many states. But the situation is expected to change now that M&M has acquired a controlling stake of 55.2%. Post acquisition, the EV technology will be made available to a variety of vehicles in passenger, commercial, utility and SUV segments in M&M?s product portfolio. Reva will be able to reach across the country through the strong network of M&M, which has more than 500 dealership outlets for automotive products while having direct and franchise distribution in over 20 countries.

According to studies by Frost & Sullivan, PwC and Boston Consulting Group, the global EV market is expected to grow to 1.5-4.25 million units by 2020, when the Indian EV market is expected to touch 80,000-1,00,000 units, as per domestic estimates. Mahindra Reva?s target of selling 50,000 EVs worldwide and acquiring 25% market share in India by 2020 will be not be so tough with several countries supporting green cars.

Barack Obama?s August 2008 speech highlighted that there would be about one million EVs in the US by 2015 while several European nations are offering bumper sops for green cars. Currently, only a few electric players are competing in the global market. Among them, Reva of India, ElBil Norge of Norway, Aixam of France, EFFEDI of Italy and EuAuto of Hong Kong have a major chunk in the ?affordable? electric-driven small/mini car business. With the availability of readymade technology and rich cash resources, Mahindra Reva can now strike it rich in the EV space.

jaishankar.jayaramiah@expressindia.com