Mahindra & Mahindra Limited plans to expand sport utility vehicle (SUV) and tractor manufacturing capacity over the next two years while targeting annual electric vehicle (EV) volumes of more than 80,000 units in calendar 2027. The company detailed the expansion roadmap during its Q3 FY26 earnings conference call held on 11 February 2026.
The automaker will add 5,000 to 6,000 units of monthly internal combustion engine (ICE) capacity by July–August FY27 through de-bottlenecking across its Nashik and Chakan plants, covering models including 3XO, Bolero, Scorpio-N and Thar. An additional 3,000 EV units per month will be added with the scale-up of the 9S, taking total incremental monthly capacity in the first phase to 7,000 to 8,000 units.
A further 7,000 to 8,000 units of ICE capacity will be introduced in calendar 2027 at Chakan for products based on the new IQ platform. From calendar 2028, production will begin at the Nagpur greenfield facility, with an initial addition of 8,000 to 10,000 units in the first year.
“In 2028, depending on how quickly we are able to get actual possession of the land and productionize it, we would probably add, in year 1 at least 8,000 to 10,000 more. It will ramp up to 500,000 over a period of time,” said Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector.
In the tractor segment, the company is adding 100,000 units of annual capacity at Nagpur for Mahindra-branded tractors and evaluating additional expansion for Swaraj. Tractor industry growth for FY26 is expected to reach 24 percent. “This year is going to end at 24 percent growth, which no one expected,” Jejurikar said, adding that capacity remains tight following strong demand.
On EVs, Mahindra expects its three-model portfolio to deliver 7,000 to 8,000 units per month in calendar 2027, translating to more than 80,000 units annually. A new EV, internally codenamed BO7, is scheduled for launch in calendar 2027 as an additional volume driver. The company has sold more than 41,000 e-SUVs so far, with vehicles cumulatively covering 325 million kilometres.
The company has been accruing a 13 percent Production Linked Incentive (PLI) benefit on eligible EV variants. “We have been accruing 13 because nobody else has qualified,” Jejurikar said, noting that future accruals could range between 8 and 13 percent depending on supplier eligibility.
Mahindra’s standalone auto business reported margins of 10.4 percent excluding contract manufacturing. The EV business generated INR 1.75 billion in end-to-end EBITDA during the quarter. A 1 percent price increase was implemented in January to address commodity inflation. “There is headroom on price. It is just that we would not want to push it unless we feel it is necessary,” Jejurikar said.
In the farm segment, farm machinery revenue rose 45 percent, with monthly revenue crossing INR 1 billion in recent months. Co-tractor margin stood at 21.2 percent. The company also recorded impairments in its Japan entity and Turkey foundry operations as part of restructuring. “There will be costs but not of the magnitude that you saw today,” said Amarjyoti Barua, Group Chief Financial Officer.
Mahindra Finance has shifted towards growth after three years of focusing on asset quality, controls and technology, with gross non-performing assets remaining below 4 percent in recent quarters. “The business is on a very strong track. And now we have pivoted to growth, we will grow responsibly,” said Anish Shah, Group Chief Executive Officer and Managing Director.
Mahindra & Mahindra Limited is an Indian manufacturer of SUVs, light commercial vehicles and tractors, with operations spanning farm machinery, electric mobility and financial services.