Mahindra's Electric Car Business Reports ₹111 Crore Profit in Q1

In a sector where global automakers are still wrestling with losses from their electric vehicle operations, Mahindra & Mahindra has taken an early lead. The company’s EV division reported a healthy ₹111 crore EBITDA in the first quarter of FY26, on total revenues of ₹2,800 crore. These figures underscore a rare combination of growth and profitability in a segment that is still evolving and often expensive to scale.

The Q1 results offer evidence that Mahindra’s EV playbook, based on modular platforms, targeted launches, and operational efficiency, is working. What was once a cautious foray into electrification is now beginning to look like a well-structured business with strong financial legs.

Electric Market Share Swings in Mahindra’s Favour

The highlight of the quarter is Mahindra’s surge in electric SUV market share. The company now commands a 44.3% share of EV revenue in India, with a volume share of 31.8%. That’s a huge jump from just 6.3% in Q1 last year. It also puts Mahindra neck and neck with MG Motor and significantly ahead of Tata Motors, which until recently was seen as the default EV leader in the country.

Within its own SUV portfolio, Mahindra has achieved 7.8% EV penetration, ahead of the industry’s 5.6% average. Perhaps even more notable is the customer profile: women account for nearly 80% of Mahindra’s EV buyers, a stark contrast to its internal combustion models. This demographic shift is giving the company fresh insights into how to position future products.

Profit Model Built Across Two Companies

A closer look at the ₹111 crore EBITDA reveals a two-pronged strategy. The bulk of the operating profit, ₹90 crore, came from Mahindra Electric Automobile Limited (MEAL), which handles the distribution and retail of EVs. The rest, ₹21 crore, was generated through Mahindra’s manufacturing operations under a contract model at the Chakan facility.

This hybrid structure allows Mahindra to stay agile. The separation between production and retail lets each part of the business focus on what it does best, while collectively contributing to the bottom line. It also means that as production scales, so can profitability, without needing to overhaul internal systems.

PLI Incentives Could Improve Margins Further

What makes the current profit even more significant is that it does not include any benefits from the government’s Production-Linked Incentive (PLI) scheme. Mahindra has already qualified for PLI benefits on the XUV9e and expects certification by Q2 or Q3 of this fiscal. It will also apply for PLI on the BE6 model in Q4.

These incentives could boost margins further, especially at a time when automakers are under pressure to deliver both scale and cost efficiency. Rajesh Jejurikar, Executive Director at Mahindra, has clarified that none of the PLI gains have been booked yet, which leaves room for more upside in future quarters.

No Disruptions Despite Rare Earth Shortages

The global auto sector has seen increasing disruption due to a shortage of rare earth materials, which are crucial for EV motors. Mahindra, however, has remained unaffected so far. The company has enough inventory to last until the end of Q4 and is actively exploring alternatives such as ferrite magnets and light rare earth materials.

This proactive planning has allowed uninterrupted production, helping Mahindra meet growing demand without compromise. In a sector where delays and shortages can cost market share, such resilience becomes a competitive advantage.

Mahindra, MG Now Ahead of Tata Motors

The shift in the electric vehicle leaderboard is clear. As of June 2025, Mahindra and MG Motor together held over 53% of the EV market, effectively doubling the market share of Tata Motors. Mahindra’s electric-first INGLO platform, which underpins the XEV9e and BE6, has enabled the company to rapidly scale its EV output while keeping development costs in check.

Consumer interest has also been strong, with over 30,000 bookings on the first day for the new models. That enthusiasm has translated into a six-month waiting period in some cities, pointing to demand that outpaces current supply.

Steel Prices Could Challenge Future Margins

One area of concern is the rise in steel prices, which have gone up by around 6%. Mahindra may need to consider price hikes to manage these costs, though the company has said it will try to absorb as much of the increase as possible through efficiency improvements.

As the company scales both its ICE and EV operations, managing input costs will be critical to maintaining healthy margins. Any decision to increase prices will have to be weighed against maintaining affordability in a price-sensitive market.

Production Plans on Track

Mahindra currently produces around 4,000 electric vehicles a month and plans a gradual ramp-up. Deliveries for the higher-end Pack Three and Pack Two variants have already started, and other trim levels will follow by August 2025.

Given the strong booking numbers and wait times, Mahindra’s ability to scale production will play a key role in sustaining its EV momentum. The company will also need to ensure that its supply chain can handle increased volumes without compromising on quality or delivery timelines.

EV Division Becomes Growth Engine

Mahindra’s Q1 performance makes one thing clear: its EV division is no longer a side project. With consistent profitability, rising market share, and a clear roadmap for expansion, Mahindra’s electric push is turning into a reliable growth engine.