Mahindra & Mahindra (M&M) is focusing on the electrification of its portfolio to comply with tightening efficiency and emissions regulations in India, while continuing to refine its internal combustion engine (ICE) range and expand customer options across segments.

As India prepares for the next phase of Corporate Average Fuel Efficiency (CAFE) norms, which will introduce stricter CO2 limits from April 2027, the company considers electric vehicles (EVs) to be a key factor in achieving compliance.

According to Nalinikanth Gollagunta, Chief Executive Officer of M&M's Automotive Division and Executive Director of Mahindra Electric Automobile Ltd, EVs are relevant both from a demand perspective and for regulatory compliance. M&M currently records over 8% EV penetration and expects that if this figure reaches the high teens, it will fall within the compliance range required under the CAFE standards.

The Bureau of Energy Efficiency's draft CAFE 3 norms, released in September, propose stricter average CO2 limits while easing requirements for sub-4-metre petrol cars. The draft also suggests providing similar incentives for EVs and range-extender hybrid electric vehicles (REEVs), along with benefits for plug-in hybrid, strong hybrid, and flex-fuel vehicles.

While awaiting final clarification on the CAFE norms, Gollagunta stated that the company's current EV portfolio and the upcoming NU-IQ platform are expected to help it maintain compliance with future standards.

M&M will continue with a multi-powertrain approach, offering various powertrain and transmission options to allow customers to choose based on individual preferences rather than being limited to a single technology.

In the EV segment, Mahindra currently offers the BE6, XEV 9e, and XUV400.

Technology strategy

While some automakers are adopting hybrid technologies as an interim solution, Mahindra is maintaining its focus on full electrification. Gollagunta described hybrids as an alternative powertrain similar to diesel - capable of higher fuel efficiency but not zero emissions. He stated that hybrids do not fully meet strategic goals such as reducing the fuel import bill, fulfilling commitments under the Paris Accord, or enhancing export competitiveness.

Gollagunta said EVs align with India's objectives of reducing emissions, lowering oil dependency, and supporting export-oriented automotive manufacturing. He noted that Mahindra's primary focus will remain on EVs due to their alignment with these objectives.

The company is not excluding the potential introduction of CNG or hybrid technologies in the future. Gollagunta said that if regulatory conditions make hybrids a practical option, Mahindra could consider them, along with CNG, as part of its broader strategy.

He added that as an original equipment manufacturer (OEM), Mahindra will continue to monitor emerging technologies. While EVs remain its main focus, the company intends to assess future developments.

Addressing Mahindra's absence from the CNG vehicle segment, Gollagunta explained that performance remains one of the company's core brand values, and current CNG technology does not meet those standards. However, any future advancements in CNG systems capable of delivering suitable performance will be considered.

Impact of GST 2.0

The recent GST 2.0 reforms, which reduced tax rates on entry-level ICE vehicles, have raised questions about their potential effect on EV adoption. Gollagunta said EV buyers are typically motivated by product characteristics rather than running cost calculations. He noted that approximately 60% of Mahindra's EV sales occur in states where on-road prices are already comparable to ICE models. He added that GST adjustments may affect prices slightly but are unlikely to cause major changes in demand.

Mahindra's electric range - comprising the BE6, XEV 9e, and XUV400 - continues to grow. The company also addresses consumer concerns about range, resale value, and reliability. The 79kWh battery offers a real-world range of 450-480 km, and the lifetime battery warranty is designed to lower ownership-related concerns.

Bolero update

Mahindra's approach of offering multiple choices extends to its ICE portfolio. On October 6, the company introduced updated versions of the Bolero and Bolero Neo, featuring revised pricing, new interior updates, and additional equipment.

The 2025 Bolero B4 now starts at Rs. 799,000 (US$ 9,000) (previously Rs. 879,000), while the Bolero Neo V8 begins at Rs. 849,000. The updates include new top-end variants aimed at updating the range while maintaining its suitability for rural use.

When asked about possible overlap with the XUV 3XO, priced from Rs. 728,000, or the entry-level Thar, starting from Rs. 999,000, Gollagunta said internal competition is not a concern. He stated that Mahindra's objective is to provide diverse options across models and powertrains, ensuring that each product fulfils its intended role.