Indian car maker Mahindra and Mahindra has bought a majority stake in Bangalore-based Reva Electric Car to strengthen its position in the low-emission electric car market. M and M, India’s largest SUV and tractor maker, bought a 55.2 per cent stake in Reva, a global leader in producing low-cost electric cars.
The deal includes buying out equity from the promoters of Reva and providing 450 million rupees in fresh equity. The value of the deal was not disclosed. Reva was formed in 1994 as a joint venture between the family-owned Maini Group and AEV of the U.S. to manufacture eco-friendly cars.
Reva Electric will be renamed Mahindra Reva Electric Vehicle, and will retain two directors from the Maini group and one from California-based AEV on its board. Several auto makers like GM, Nissan and Toyota are developing eco-friendly vehicles.
“Reva will help us expand our green footprint both in India and overseas,” Anand Mahindra, vice-chairman of Mahindra and Mahindra, said in a statement. “Eco-friendly transport will be the need of the hour, with issues like climate change and carbon footprint taking centre-stage globally.”
Pawan Goenka, who will head Mahindra Reva, said that Mahindra would bring to the company its experience of vehicle development and its strong distribution network. The Maini group will hold 31 per cent and AEV 11 percent of the new firm.
Reva launched its electric cars in Bangalore in 2001 and in London through the G-Wiz brand in 2004. It has about 3,500 electric cars on the road in 24 countries across Europe, Asia and Central and South America. US giant GM has an existing tie-up with Reva to develop a plug-in version of the best-selling GM Spark mini-car.
Goenka said he expected India to produce 80,000 to 100,000 EVs by the year 2020, with global sales projected at 1.5 to two million cars. Mahindra shares rose 0.64 per cent, or 3.3 rupees, to 519.45 on Wednesday at the Mumbai stock exchange. Reva is not listed.