What will be the price of Mahindra E20 electric?

How much will the Mahindra E20 (formerly called the Mahindra Reva NXR) finally cost and how cost effective is it to run? That’s a question on many a potential buyer’s mind. Now that the government has finally announced the National Electric Mobility Mission Plan 2020 (NEMMP), there is some clarity emerging.

Mahindra had delayed launching the Mahindra E20 as it was waiting for the announcement of the NEMMP, which it hoped would dole out subsidies in order to incentivize use of electric vehicles in India. A part of the NEMMP hopes to achieve three things by 2020 – the first being subsidies to incentivize use of electric vehicles, the second being investment in more research and development for electric vehicles, and third, to create a supplier base to build and support electric vehicles. Also read:Mahindra Reva NXR exclusive spy shots

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The NEMMP, announced on January 10, hopes to achieve new sales of 6-7 million electric vehicles in India by 2020, a target that seems really lofty right now. The present market in India has about 400,000 electric two wheelers (small scooters mainly) and about 1,500 electric cars, which is really tiny. Mahindra plans to produce about 6000 vehicles a year of the E20 electric car initially, although it has a plant capacity of 30,000 vehicles in Bangalore. Also read: Mahindra E20 launch delayed

What can M&M price the E20 at?

The earlier Reva-i without subsidies from the government had a shocking ex-showroom price of Rs. 4.5 lakh for the top-end model (with AC). And this vehicle ran on lead acid batteries, with a limited range of under 80 km. It also had expensive battery replacements due every 3 years, which cost about Rs. 75,000 – this almost negated the benefits and savings of driving an electric car.

The government, till April 2012, provided subsidies of up to Rs. 1 lakh (or 20%) of the cost of the car, which brought down the price of the vehicle to about Rs. 3.5 lakh – still a little pricey compared to much larger petrol hatchbacks such as the Hyundai Santro and Maruti Alto. However, the benefits of running the car at just about 40 paise per kilometre compared to Rs. 4 per kilometre for a petrol car, were huge savings especially for those living in smaller cities.

Now, consider the “grown up” Mahindra E20 – it’s a much larger car than the Reva-i and runs on more expensive lithium ion batteries. Yes, it also has a higher range (of over 100 km) and better top-speed (of 100 kmph), as well as a host of new technologies allowing for integration with your mobile phone, charging the car from the sun, using the car as a UPS to power your home etc, and it’s also spacious – seating four adults comfortably. Also see: Mahindra Reva NXR video

Can Mahindra price the E20 under Rs. 4.5 lakh? For that, it has to rely on the subsidy doled out under the NEMMP. So far it’s not clear how much that subsidy will be (the government has only estimated a total of Rs. 14,000 crore by 2020). But going by what Pawan Goenka, president – automotive and farm equipment, Mahindra indicated at a press briefing, this subsidy could be between Rs. 1 lakh to Rs. 1.5 lakh per vehicle.

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If you assume that the new Mahindra E20 has equipment and technology worth Rs. 1 lakh over the old Reva-I, that would put its ex-showroom price close to Rs. 5.5 lakh without subsidies. But if you factor in the subsidy (at up to 20%) – it would work out to Rs. 4.5 lakh for the car. We also know from a source that Mahindra is directly pitching the E20 against the Hyundai i10 (as a price benchmark), which again points to the Rs. 4.5 lakh price point, though Mahindra is known to pull a few pricing surprises. The car will be launched in early February now (3 weeks’ time).

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