Mahindra comes up with rent-a-battery scheme for e2o electric car

Home-grown Indian car maker Mahindra & Mahindra has come up with an innovative scheme that will slash the ownership cost of its electric car e2o by up to Rs1.7 lakh and also reduce battery maintenance hassles.

Mahindra Reva Electric Vehicles, an arm of the Mahindra Group which makes the e2o, on Tuesday introduced the scheme under which a customer does not need to buy the battery, but can rent it for a monthly fee.

"What we are doing with the scheme is bringing down the cost of acquisition while we guarantee the customers battery performance coupled with inflation-proof running costs. We will own the battery, all that the customer needs to do is pay a monthly fee," Mahindra Reva chief executive officer Chetan Maini said.

Under the scheme, a customer needs to pay an 'energy fee' starting from Rs2,599 per month which will allow the user to drive 50,000 km (800 km of usage per month) over five years. The company will also provide 24x7 assistance, and guarantee a courtesy car during battery repair period.

"With this, the acquisition cost of the e2o will come down on an average by about Rs1.7 lakh in cities, including Bangalore, Delhi and Mumbai, where it is presently available," he said.

For instance, in Delhi the base variant of the e2o will come at Rs4.99 lakh against Rs6.5 lakh earlier, he added.

Commenting on the idea behind the scheme, Maini said, "We have had a lot of customers who liked the car but were deterred by the cost. Now with this, we hope we will make it more affordable for them and push up sales."

Sales of the electric car have not met expectations, with less than 500 units sold since it was launched in March last year.

Expressing disappointment over the interim budget proposals, he said: "It has done something for the conventional car but the electric segment has been left out."

Finance minister P Chidambaram on Monday announced cutting of excise duty on small cars, motorcycles, scooters and commercial vehicles to 8 per cent from 12 per cent, and of utility vehicles to 24 per cent from 30 per cent. Large cars also saw excise reduction to 24 per cent from 27 per cent earlier and mid-sized cars to 20 per cent from 24 per cent.