Ola's Electric Scooter, M&M's XUV700 May Face Hurdles. Demand Not One Of Them
Demand may not be the problem for Mahindra & Mahindra Ltd., which aims to boost share in the market for SUVs, and Ola’s plans to disrupt the market for battery-powered scooters in India.
But lack of a supply chain and retail network could set back Ola, while the global shortage of semiconductor chips could hamper M&M’s plans, two auto experts told BloombergQuint in an interaction.
“Ola’s aggressive pricing has the potential to disrupt the market,” Hormazd Sorabjee, editor of Autocar India, said, adding that on paper Ola ticks a lot of boxes “The revolution really starts here with Ola and its aggressive pricing.”
He, however, said the Indian market isn’t EV friendly in many ways. “Whether you take the charging infrastructure, unpredictable range and overall cost as people are price sensitive. I’m a little sceptical on the pace of change, but it’s definitely happening,” he said, adding supply chains could take time to develop.
And M&M’s recently launched XUV700 delivers on specifications and pricing in the segment, he said. “They have hit it out of the park.”
But the automaker is the worst hit owing to the semiconductor shortage, impacting its ability to deliver the Thar vehicle, which has received over 50,000 bookings, according to Gaurav Vangaal, associate director at IHS Markit.
But they have only been able to deliver 23,000 vehicles so far and others have a waiting period of up to 10 months, Vangaal said.
Sorabjee agreed, and said M&M needs to take care of its supply and production constraints.
Watch the interaction here: