The IFC, which is the lending division of the World Bank, has announced plans to invest Rs 600 crore in the Mahindra Group’s electric mobility business, with the aim of expanding its offerings of inexpensive electric three-wheelers and small commercial vehicles.Mahindra Group announced the investment in NewCo, its new subsidiary, via a stock exchange filing.
The investment marks IFC’s first investment in an EV manufacturer and its first in electric three-wheelers globally, with mandatory convertible instruments valued at up to Rs 6,020 crore. Anish Shah, MD and CEO of Mahindra & Mahindra, said, “Decarbonising the transport sector is crucial to achieving the climate goals that India has set for herself.
IFC, with its focus on sustainability and boosting prosperity, is an ideal partner for us.” IFC’s Regional Director for South Asia, Hector Gomez Ang, added, “India is the largest three-wheeler market globally, and this investment marks a significant step towards scaled domestic production of electric vehicles catering to this segment as well as small commercial vehicles.” IFC’s investment will lead to its ownership of between 9.97 per cent and 13.64 per cent in NewCo, according to Mahindra Group.
“By supporting a leading market player, IFC hopes to encourage other large automotive manufacturers to follow suit, driving EV adoption across India and helping the government deliver on its climate targets,” said Ang.
India aims to reduce its emissions profile by 45 per cent by 2030, and electrifying the transport sector, which contributes about 13 per cent of the country’s greenhouse gas (GHG) emissions, can help significantly reduce the impacts related to GHG emissions and other air pollutants. Rajesh Jejurikar, Executive Director and CEO (Auto & Farm Sector) of Mahindra & Mahindra, noted that the last-mile mobility business presents a significant opportunity for electrification and growth.
