Mahindra has offered its Battery-as-a-Service ownership programme in its latest XEV 9S and XEV 9e electric SUVs. As per the new BaaS plan, the XEV 9S starts from ₹12.65 lakh ex-showroom, while the XEV 9e starts from ₹13.90 lakh, ex-showroom. There is a saving of ₹8 lakh with BaaS as against the standard ex-showroom prices which stand at ₹20.65 lakh and ₹21.90 lakh respectively.
Battery as Service scheme does not include the battery cost within the ex-showroom price of the vehicle. The buyer pays the battery usage charge based on the distance travelled. According to Mahindra, the effective usage cost under BaaS plan works out to ₹3.75 per km, calculated using a starting battery EMI of ₹6,975 and a daily running average of 60km.
Through this update, all of Mahindra’s born-electric vehicles will be available under the BaaS scheme. Mahindra has made it available across all variants of the BE 6 Sporteq, whereas earlier it was available only on Pack One and Pack Two variants with the small 59kWh battery.
How BaaS works?
Battery-as-a-Service is a pricing structure where the cost of the battery is separated from the cost of the car. The buyer pays a lower upfront cost of the vehicle, while the cost of the battery is financed separately in fixed tenure and fixed interest rate, depending on the financier.
Under BaaS scheme, buyers will have to pay the battery usage charge in addition to the car loan EMI. This includes the cost of only battery financing and not the cost of electricity used to charge it.
The Mahindra BaaS scheme is meant to bring down the initial outflow of money for the buyer. Through the scheme, Mahindra is bringing down the upfront cost by ₹8 lakh and making its electric SUVs more accessible to the buyer who may find EVs expensive.
However, customers need to evaluate the expected annual usage. In case the customer uses the vehicle for high mileage, he may end up paying much higher than the cost of purchasing the battery in one go. For low mileage buyer, it will be helpful due to lower initial cost and lower monthly outflow.
Pricing of Mahindra XEV 9S and XEV 9e
The starting showroom prices for the Mahindra XEV 9S are in the range of ₹20.65 lakh to ₹30.15 lakh. On the back of BaaS, however, its starting price has come down to ₹12.65 lakh. This would make the electric SUV competitive with other mid-sized electric crossovers.
In contrast, the XEV 9e comes in between ₹21.90 lakh and ₹30.50 lakh without the BaaS programme. With BaaS, its starting price has been reduced to ₹13.90 lakh.
Mahindra has not given a breakdown of prices of each trim in detail along with battery-rental. Customers will have to visit dealerships or the official website to understand the prices for their selected variant.
The starting EMI for the XEV 9S, sans BaaS, is ₹29,926 per month. In comparison, the XEV 9e has a starting EMI of ₹31,695. However, the EMI will depend on many factors, including loan tenure and down payment.
BE 6 Sporteq Gets BaaS too!
Along with the XEV 9S and 9e, Mahindra has also announced the availability of its battery-as-a-service on the BE 6 Sporteq. Earlier, the programme had been made available only for Pack One and Pack Two trims along with the 59kWh battery.
The starting showroom price of the BE 6 Sporteq ranges from ₹19.45 lakh to ₹26.95 lakh. With BaaS, its price will be reduced further. However, Mahindra has not revealed the reduced prices for each variant.
The BE 6 Sporteq is an entry-level offering from Mahindra compared to XEV 9e and XEV 9S. The compact SUV offers good practicality to urban buyers looking for an affordable electric SUV.
By expanding the availability of the BaaS programme on all variants, Mahindra is providing customers an opportunity to choose their desired variants and still get the benefits of the reduced price.
Comparison of the BaaS programme with Other BaaS Plans
The JSW-MG Motor India was the first carmaker to launch BaaS in India with its Windsor EV. Since then, several others like Tata Motors, Maruti Suzuki, Toyota, Hyundai and Citroen have launched such programmes as part of their electric vehicle pricing strategy.
The Mahindra BaaS programme is based on the same principle of reducing the initial purchase price by excluding the battery price and recovering the cost through per kilometre usage charge.
Similarly, Mahindra’s BaaS scheme is based on the same principle: reduce the initial purchase price by not including the cost of the battery and compensate it via a per kilometer charge.
However, customer acceptance of BaaS in India seems to be low. People are not familiar with the system, and they prefer conventional ways of purchasing that include buying the battery as a part of the package.
However, the company’s decision to implement the BaaS program across its whole electric portfolio shows that there is potential in the program to appeal to price-sensitive customers.
The success of the program will rely on customer reaction to both lowered initial prices and per kilometer charge of the battery throughout the lifetime of the ownership.
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Who Should Consider BaaS?
The following buyers will find the BaaS program to be useful in their purchases of electric cars because:
They have a limited budget to invest in the purchase
They want to have lower monthly costs in the initial years of the ownership
They use vehicles moderately each day
They want to try an electric SUV but cannot afford a battery cost
However, customers who drive a lot should consider their total expenses carefully because the sum of usage fees in this case might exceed the sum that they would spend buying the battery.
Customers who want to own the car for a long time will prefer to buy the battery to avoid paying the usage fee all the time. Resale value should be taken into account as well because the ownership of the battery affects resale.
Impact on Mahindra’s Electric Car Strategy
Thus, Mahindra shows its intention to provide flexible ownership options for customers in order to make electric SUVs more affordable while giving a choice to customers who prefer other ways of purchasing the vehicles.
The XEV 9S and XEV 9e are important products for Mahindra’s electric car line. They feature spacious cabins, modern technologies, various battery sizes and unique design. With the introduction of BaaS, these two vehicles might become more attractive to people.
With initial prices being ₹12.65 lakh for the XEV 9S and ₹13.90 lakh for the XEV 9e, Mahindra provides an attractive entry point in the middle-sized electric SUV market.
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