SoftBank in talks to pick up minority stake in Mahindra Electric Mobility

Mahindra Funster EV concept which was launched in Auto Expo 2020
Mahindra Electric Mobility, one of the country’s largest electric vehicle (EV) manufacturers, is in preliminary talks with Japanese giant SoftBank for an alliance which could include taking minority stake in the company.

The company, in which Mahindra & Mahindra (M&M) is the key investor, publicly announced a few weeks ago that it would look for a private equity investor or a strategic investor to scale up its operations, though M&M will continue to stay as a big investor. 

Mahindra Electric Mobility sold over 10,400 EVs in 2018-19 — that’s  growth of over two and a half times the previous financial year. It expects to see another huge jump in sales in 2019-20.

An M&M spokesperson declined to comment on the reported talks with SoftBank; the latter’s spokesperson also said it did not comment on speculation. 

However, sources say that since Mahindra Electric Mobility is talking to a diversified range of potential investors, which also include those with whom it can develop EVs, powertrains, and chargers, among others, it is uncertain if the discussions with SoftBank will lead to a tie-up.

For SoftBank, EVs are a key area of focus. It has already invested over $250 million in Ola Electric Mobility, where it is a key investor, valuing the company at $1 billion. 

Ola has spun off its electric mobility business into a separate entity and has an ambitious target to put over 1 million EVs on Indian roads by 2022. It has been running numerous pilots on EVs. It is building charging stations and has set up a research and development centre. 


EV sales in FY19; up from 576,000 the previous year — bulk being three-wheelers (630,000) and two-wheelers (126,000). Only 3,600 four-wheelers were sold 


EVs on Indian roads are low-speed e-scooters (less than 25 km per hour); they don’t need licences or registration


EV sales percentage of total vehicles sold; have potential to go up to 5% in some years

The parent company has also raised $300 million from Hyundai and Kia and has been focusing on India-specific EVs.

SoftBank’s other advantage is that it is one of the key shareholders in Ola and Uber’s transportation services business; it is this business that is expected to be one of the main buyers of bulk EVs — cars, three-wheelers, two-wheelers, and buses. 

Experts say this is an advantage which Mahindra can leverage if the tie-up happens.

As it happens, SoftBank Group’s subsidiary, SB Energy Corp, is in the mobility business, which combines renewable energy with EV battery cells to develop services. The subsidiary has substantial interest in India.  

Mahindra Electric Mobility started its push into EVs after buying out Reva Electric Car Company. It now sells a range of EVs. The company clocked up revenues of Rs 25,130 lakh in FY19, over double the previous financial year’s, though its losses also went up in the same period. In 2019, the company launched Treo, the first lithium-based three-wheeler from its stable. Its other vehicles include the flagship e-Verito and e20 passenger car, the Supro for cargo transportation, and three-wheelers.

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