ALLIED BUSINESSES The rising demand for power back-up solutions and infrastructure development will create opportunities in the power generation and infrastructure equipment space. This is an opportunity for the Company to grow its offerings in power solutions and construction equipment. RISKS AND CONCERNS AUTOMOTIVE AND FARM EQUIPMENT SECTORS The Company's business is exposed to many internal and external risks and it has consequently put in place robust systems and processes, along with appropriate review mechanisms to actively monitor, manage and mitigate these risks. COMPETITIVE INTENSITY Given the high growth potential of the Indian automotive market, both domestic and global OEMs have established a strong presence across all vehicle segments. Multinational players are now deeply entrenched, supported by local R&D centres, supplier networks, and widespread channel reach. In the passenger vehicle segment, the line between cars and utility vehicles (UVs) has blurred, with demand shifting decisively toward UVs—resulting in more UV launches than Passenger Cars. By FY24, two out of every three PVs sold were UVs. From crossing 1 million UV sales in FY20, the segment surged past 2.8 million annual units within five years. In commercial vehicles, LCV < 3.5T continue to lead, accounting for over 50% of sales. To stay competitive and sustain its leadership, Mahindra continues to invest in new product development, technology upgrades, expanded channel reach, and customer-centric offerings across products, services, and brand building. TAX REGULATIONS India has traditionally maintained differential tax rates for passenger vehicles based on length, ground clearance, engine size, and fuel type. While Mahindra’s flagship products attract higher taxes, we have strategically expanded our UV portfolio—featuring models like XUV 3XO, Bolero Neo, Bolero, and Thar—that fall under lower tax slabs. Our electric UVs, including the XEV 9e, BE 6, and XUV 4OO, attract the lowest GST among all PV categories. NEW REGULATION FOR SAFETY Growing road safety concerns are driving regulatory reforms. New norms often require technology upgrades and add to vehicle costs. Mahindra is well-prepared and confident in meeting all emerging safety standards. NEW PRODUCTS AND TECHNOLOGIES Mahindra continues to invest in future-ready product and technology development to remain competitive, meet evolving customer expectations, and comply with regulations. Alongside electrification, we are advancing alternative fuel technologies. ENVIRONMENT AND ALTERNATE FUELS Amidst rising air quality concerns and the push to reduce fossil fuel dependence, the Government is promoting large-scale EV adoption—particularly for intra-city fleet use. As an EV pioneer in India, Mahindra is actively developing electric mobility solutions while also investing in alternative fuel platforms. COMMODITY PRICING Commodity prices in FY25 fluctuated sharply due to global supply-demand imbalances, policy uncertainties, and geopolitical disruptions. Mahindra remains focused on cost optimization through value engineering, supplier negotiations, and long-term price contracts. We continue to actively manage risks through robust hedging practices under Board-approved foreign exchange and commodity risk management policies. CAPACITY Mahindra produced over 8 lakh PV and CV units in FY25, with capacity utilization exceeding 85%. We operationalized a cutting-edge eUV plant and a battery manufacturing unit with 98% automation. Our Vision AI-based processes have enhanced production robustness. A dedicated capacity of 90,000 units annually has been created for our next-generation electric vehicles. Partnering with key suppliers, we are leveraging digital tools to scale supply chain capacity and responsiveness. INADEQUATE EV CHARGING INFRASTRUCTURE IN THE COUNTRY To support 30% penetration in 4W category as per Government of India’s vision by 2030, we would need an estimated ~1.4 lakh DC charging points across cities and highways, which is ~10X more than the currently estimated Direct Current Charging Points infrastructure in India. The ramp up of fast charging is supported well by Government of India through various incentive schemes such as PM E-DRIVE. At Mahindra, we are establishing home chargers as per customer’s needs which caters to ~85-90% of the charging demand of an individual customer and also contributing to scale the Public EV charging infrastructure through various participating models. Integrated Annual Report 2024-25 | 148
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