Mahindra & Mahindra’s Greenfield Gamble: Can the SUV Bet Pay Off by FY28?

Mahindra & Mahindra (M&M) is doubling down on its SUV dominance with a ₹12,000 crore bet on a state-of-the-art EV manufacturing hub in Chakan, Maharashtra. This greenfield plant—set to become operational by early 2025—aims to catapult M&M into a leadership position in electric SUVs by FY28, even as it navigates a fiercely competitive market.

The Greenfield Gambit: Capacity, Technology, and Timing

The Chakan plant is no ordinary factory. With an annual capacity of 90,000 units, it will produce M&M’s “Born Electric” SUV lineup, including the XUV.e8 and BE.05, targeting ranges of 420–500 km and competitive pricing. The facility leverages cutting-edge automation—over 1,000 robots, AI-driven body shops, and IoT-monitored “Nerve Centers”—to ensure precision and scalability. By 2027, EVs are expected to account for 20–30% of total SUV sales, a milestone critical to M&M’s FY28 vision.

The plant’s infrastructure is equally ambitious. Its battery assembly line employs patented technologies for geometric accuracy and safety, with IP67 ingress protection and real-time thermal monitoring. This focus on quality is paired with sustainability: the facility runs entirely on renewable energy and aims for a 25% gender-diverse workforce, underscoring M&M’s ESG commitments.

The Investment Case: Why Now?

The ₹12,000 crore investment (FY24–FY27) is self-funded from operational cash flows, reflecting M&M’s confidence in its conventional SUV cash cows like the Thar and Scorpio-N. Domestic SUV sales hit 52,330 units in April 2025, a 28% year-over-year jump, while exports surged 82% to 3,381 units—a testament to global demand.

Yet the real prize is the EV transition. M&M plans to launch six Born Electric SUVs by early 2027, including the flagship BE.05 (due October 2025) and the luxury BE.07 (April 2026). These models aim to rival global players like Tesla and BYD, leveraging Volkswagen-sourced motors and a “no-fault-forward” battery strategy for reliability.

Risks and Competitors Lurking

The path to FY28 is fraught with challenges. First, competition is intensifying. Tesla’s price cuts and BYD’s aggressive India entry could squeeze margins. A would reveal how investor sentiment reacts to these pressures.

Second, costs and scale matter. While M&M aims for EV margins “comparable to ICE vehicles,” achieving this requires economies of scale. The Chakan plant’s ₹90,000-unit capacity must be fully utilized—a hurdle given current EV adoption rates.

Third, the tractor business, which contributes 30–35% of revenue, remains vulnerable to monsoon variability and rural demand fluctuations. A poor monsoon could strain cash flows, complicating EV investments.

The Strategic Balancing Act

M&M is walking a tightrope between two worlds. It allocated ₹14,000 crore through 2030 to maintain dominance in ICE SUVs, with six new models and three refreshed variants planned. This dual focus ensures cash flow stability while transitioning to EVs.

The company also seeks battery localization to reduce costs, though partnerships are still in talks. This is critical: 30% of EV costs stem from batteries, and local production could cut reliance on volatile global supplies.

The Bottom Line: A High-Stakes, High-Reward Play

Mahindra’s FY28 ambitions hinge on executing this EV-SUV pivot flawlessly. With a 28.5x PE ratio, investors are pricing in success—but the risks are clear.

• Upside: If the Chakan plant meets its 2027 targets (20–30% EV SUV sales) and global exports grow, M&M could capture a $120 billion global EV market. Its “Make in India” strategy aligns with government incentives, giving it a leg up on imports.
• Downside: Margin pressure from price wars, delayed battery partnerships, or slower-than-expected EV adoption could derail profits.

The verdict? M&M’s gamble is bold and strategically sound, but execution will determine whether it becomes an EV titan or a cautionary tale. For now, the wheels are in motion—and the stakes couldn’t be higher.

Conclusion: Mahindra’s FY28 pivot to EVs is a defining moment. With ₹12,000 crore invested in automation, innovation, and sustainability, the Chakan plant positions M&M to capitalize on rising EV demand. However, success requires navigating fierce competition, scaling costs, and sustaining ICE cash flows. Investors should monitor EV sales penetration rates, battery partnership progress, and tractor business resilience closely. If M&M hits its targets, this greenfield bet could redefine Indian automotive leadership—making FY28 a turning point for the company.