MG Motor is looking to convince EV skeptics with a new plan for them. Tip: You can buy the EV and battery separately

New Delhi: JSW-MG Motor India is looking to woo hesitant electric vehicle (EV) buyers with a financing scheme that addresses concerns over battery life, resale value and price – issues that deter potential buyers from making the switch from internal combustion engine (ICE) vehicles.

MG has launched a battery-as-a-service (BaaS) model for its Windsor EV, which was launched on Wednesday as the first product of the JSW-MG joint venture since it was formalized in March.

This allows customers to pay only for the “shell” of the car up front and choose to pay for the battery (essentially the heart of an electric vehicle) by the kilometer ( ₹3.5 per km according to one of the battery rental plans announced by MG).

While this isn’t entirely new in India (Mahindra’s Reva introduced a similar battery leasing option in 2010), the Windsor is the only passenger vehicle offered with this solution today.

MG Motor is also evaluating the potential of adopting the BaaS model in its other electric vehicles.

Affordable

MG Motor’s new BaaS model could make EV ownership affordable. ₹9 lakh ICE car, the monthly expense including fuel and maintenance averages around ₹38,000, Parth Jindal, director of JSW MG Motor India, said on Wednesday.

“In comparison, the ₹9.99 lakh Windsor EV, with its battery-as-a-service plan, would cost approximately ₹29,500 in EMI and ₹6,750 in operating expenses, for a total of approximately ₹36,250 per month. This EV, much larger, much wider and with many more features, is equivalent, for the end customer, to a ₹“A 9 lakh internal combustion engine car,” he said.

Industry experts are skeptical about the potential acceptance of a BaaS model for passenger vehicles and say it will need more time to emerge as a fully evolved model.

“Now that battery prices have come down significantly to around $100 per kWh, we are rapidly approaching price parity with internal combustion engine vehicles. OEMs are passing these benefits on to consumers. Now that price is becoming less of a factor, does a battery subscription model really justify it?” said Ashish Malik, an independent business strategy consultant and EV industry expert.

“Also, Indian consumers have an all-inclusive mindset. They are wary of recurring extra charges, as seen in the case of value-added software on their vehicles. Battery subscription has failed in the past due to lack of clarity regarding battery ownership at the end of the subscription period. What happens to the resale value of the vehicle without its core? Most people also tend to sell their vehicles directly in the second-hand market as they get higher resale values ​​than when they sell through OEM dealerships,” he said. Mint.

Invest in training

Meanwhile, to ensure customers understand the new model, MG Motor said it will invest in extensive training for its employees and dealers.

The Windsor EV will come with a lifetime battery warranty for customers and an assured 60% buyback value after three years for those who purchase a three-year maintenance plan with the car – a first for any passenger electric vehicle on the market today.

MG Motor said its electric vehicle sales grew 52% in the first seven months of the year. The company aims to surpass 50% of its sales from electric vehicles with the introduction of the Windsor EV.

“We want electric vehicles everywhere in this country… The only way to get there is through this kind of innovation,” Jindal said. “We need to play a leadership role, because others have other agendas. They have big engine factories… We are a clean, new, five-year-old company. We have to be aggressive and we have to bring these concepts.”

The company is targeting 80% localisation, including battery assembly, and JSW is considering getting into cell manufacturing. “We are already assembling the battery and as far as cell manufacturing is concerned, JSW has plans to get into cell manufacturing,” Rajeev Chaba, president and managing director, MG Motor India, told reporters.