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Mahindra teams up with Uber to run electric cabs in India

Fleet of electric cars to run in Delhi, Hyderabad

The logo of Mahindra and Mahindra at a showroom in Mumbai   © Reuters

NEW DELHI (NewsRise) -- Mahindra & Mahindra, India's second-biggest sport-utility vehicle maker, joined hands with Uber to run electric cabs in the country from early next year, amid a government push to electrify all vehicles by 2030.

The two companies said they will initially offer "hundreds of electric vehicles" in Delhi and Hyderabad while they explore expanding the alliance to other parts of the country.

India and China are pushing automakers to build more electric vehicles as they seek to rein in widespread pollution, reduce oil imports, and compete in the growing global market for eco-friendly vehicles. France, Norway, and the U.K are also asking auto makers to sell electric vehicles over the next two decades.

"Electric vehicle adoption is clearly gaining momentum in India," said Pawan Goenka, managing director of Mahindra. "As the pioneers of electric vehicles in the country, we would like to be at the forefront, leading this change toward and sustainable mobility."

Mahindra would supply its electric car models -- the e20Plus hatchback and the eVerito sedan --to Uber. The Mumbai-based company is one of the earliest entrants to the electric vehicle business, acquiring electric carmaker Reva in 2010.

The alliance with Uber is a key step for Mahindra to help accelerate the large-scale adoption of electric vehicles in India, Goenka said. The tie-up follows the auto maker's partnership this week with Zoomcar, a car rental company, to use the e20Plus car.

Meanwhile, Mahindra's rivals are either rolling out their electric vehicle plans for India or drawing up strategies to exploit this potential growth market.

Toyota Motor and Suzuki Motor last week unveiled plans to manufacture and sell electric vehicles in India by the turn of the decade. India's Tata Motors is working on an electric version of its Nano small car, and already developed an electric version of its Tiago and Bolt hatchbacks.

In October, the government issued a tender to purchase 10,000 electric sedans --billed as the world's single-largest electric vehicle procurement program. Tata Motors emerged as the lowest bidder for the contract and would be able to supply 70% of the tender size. Mahindra was the second-lowest bidder and-is eligible to supply the remaining cars.

Authorities are expected to shortly call bids for electric three-wheelers and electric buses. Prime Minister Narendra Modi's government wants to improve India's energy security by reducing fuel imports, and at the same time, bring down high levels of pollution in major cities, especially the national capital. In May, a report by the federal think tank Niti Aayog suggested reducing India's energy demand by 64% and carbon emissions by 37% by 2030.

India's plans however face two serious challenges: inadequate charging infrastructure for electric vehicles and high cost of batteries.

Mahindra's Goenka said the company is working with vendors to bring down the cost of components including batteries.

The partnership with Mahindra gives Uber a head-start over India's Ola, its biggest rival in the fast-growing market. The U.S.-based cab aggregator already uses Mahindra vehicles among other brands.

Under the alliance, drivers of Uber would be able to purchase Mahindra cars at "competitive prices" and access loans and insurance on easy terms as well as maintenance packages, the companies said in a statement.

Meanwhile, Goenka said Mahindra will introduce in India an electric SUV next year from its South Korean unit SsangYong. The company is also developing two electric vehicle models-- a mass market vehicle for the Indian market and a premium model for exports.

--by Santanu Choudhury

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