Uber and Mahindra to pilot Indian electric car project

Ride hailer and domestic vehicle maker to test water as government pushes to go all-electric by 2030

Mahindra's electric car "e2o Plus" in New Delhi. The firm is set to work with Uber on an electric car pilot project. Prakash Singh/AFP

The ride-hailing firm Uber will partner with the car maker Mahindra and Mahindra to pilot electric vehicles on its platform in India, the two companies said, at a time when the government is pushing to have all new vehicles electrified by 2030.

Uber will deploy hundreds of electric vehicles in Delhi and Hyderabad by March next year and will consider expanding the pilot to other cities, Madhu Kannan, the company's chief business officer for India and emerging markets said in Mumbai.

"For how long this pilot will go on is difficult to predict ... It will require adequate progress in engagement with our stakeholders before we plan to expand to other cities," Mr Kannan said, adding that Uber so far has no major roll-out targets for electric vehicles in India.

Uber joins local rival Ola, backed by Japan's SoftBank, which earlier this year launched a pilot for electric cars in the western city of Nagpur and is planning a large-scale roll-out by next year.

India is working on a new policy for electric vehicles but the car industry is sceptical about its success due to the high cost of batteries and lack of charging infrastructure, which they say could make the whole proposition unviable.

Electric car sales in India, one of the world's fastest-growing car markets, are negligible compared with annual sales of over 3 million petrol and diesel cars last fiscal year, industry data showed.

But the government is determined and plans to push the use of cleaner technology vehicles through public transportation.

"Our collaboration with Uber is an important next step to help accelerate the large scale adoption of electric vehicles on share mobility platforms and meet the nation's vision for EVs," said Mahindra's managing director, Pawan Goenka.

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As part of the deal, Uber will initially subsidise the cost of electric cars for its drivers and Mahindra will also provide finance, insurance and after-sales service. The two companies will also work with public and private firms to set up charging stations for the cars in Hyderabad.

Mahindra has previously said it would invest US$93 million over the next two to three years to develop electric vehicles. The car maker is currently working on two electric passenger vehicles, including one with its South Korean unit Ssangyong Motor, Mr Goenka said.

Mahindra also has a partnership with Ola in which the ride-hailing company agreed last year to procure 40,000 vehicles, including electricvariants.

The news comes just as Nissan, an early mover in the electric vehicle market, said it will use the Los Angeles auto show next week to send a message about petrol-fuelled engines: they're not dead yet.

Shinichi Kiga, the head of Nissan’s gasoline engine project group, said the Japanese car maker is resolved to keep improving internal combustion technology to prolong its usefulness for decades to come. A new Infiniti QX50 4x4 to be unveiled at a media event in Los Angeles on Tuesday will highlight one technology Mr Kiga plans to use.

The Nissan/Infiniti VC Turbo illustrates a challenge for policymakers eager to see the end of the internal combustion engine's dominance of transportation. While battery costs for electric vehicles are coming down, improvements in internal combustion engine efficiency could push the moment when electric vehicles achieve cost parity without government subsidies further into the future.

Advancing the internal combustion engine technology is “one of the most overlooked trends in the industry”, said James Chao, the Asia-Pacific chief of consultancy IHS Markit Automotive. “These advances beg the question. Are EVs the best solution to the issue of vehicle greenhouse emissions?”

The newfangled engine, dubbed VC-Turbo for marketing purposes, averages 30 to 35 per cent better fuel economy than the much bigger 3.5 litre V6 engine it replaces, with comparable power and torque.

Forecasts for the use of internal combustion engines over the next 10 to 15 years vary widely, but few industry officials or consultants are predicting the end of the technology by 2030, as some government regulators have suggested. Boston Consulting Group, for example, forecast the share of fully electric vehicles at 14 per cent by 2030. The consulting firm IHS Markit forecasts that by 2025 installation of gasoline engines will increase to about 73 per cent of light vehicles. Diesel's share is forecast to drop to about 17 per cent.