Indian automaker Mahindra and Mahindra Ltd claimed on Wednesday it would devote 100 billion rupees ($1.21 billion) to established up an electric vehicle (EV) production plant close to the western town of Pune.

The Mumbai-headquartered conglomerate reported the expenditure, for which it has been given approval from the Maharashtra condition authorities, would be spread over a 7-8 calendar year time period.

Recognised for its sports activities utility motor vehicles (SUVs) and jeeps, Mahindra will manufacture its approaching Born Electrical Motor vehicles (BEVs) range that features the EV variant of its well-known SUV, the XUV 700, at the new plant.

India’s automobile marketplace is very small in comparison to its populace and electric powered products make up just 1% of the complete once-a-year vehicle income of about 3 million. But the authorities wants to improve this to 30% by 2030.

The new plant will enable Mahindra take on domestic rival Tata Motors which dominates India’s EV marketplace with electrical products of its Nexon SUV and Tigor hatchback. In August, Tata acquired a previous Ford Motor plant in the western point out of Gujarat after the U.S. automaker exited the domestic sector.

Tata’s EV device, in which non-public fairness business TPG has an financial commitment, is valued at $9 billion.

The tech-to-tractors Mahindra Team is in talks with worldwide traders to increase in between $250 million and $500 million for its new EV unit which was also valued at $9 billion in July immediately after its very first increase from British Intercontinental Financial commitment (BII).

Mahindra’s to start with electrical SUV is anticipated to be obtainable for sale in January. The carmaker in August deepened its ties with Volkswagen Group, less than which the German carmaker will source electric components to its Indian peer.

Mahindra’s new plant will be in 1 of India’s oldest auto production hubs, which is residence to companies including Volkswagen and Mercedes-Benz as very well as Bajaj Auto and Hero MotoCorp.