Mahindra and Mahindra chairman Anand Mahindra said the automaker signed a memorandum of understanding with the Maharashtra government for the production and sale of electric vehicles.
The company said it would invest Rs 500 crore in its Chakan production facility for the production of electric vehicles and related components such as motors and controllers.
The manufactured components would be sent to other plants in the country that are currently assembling electric vehicles, Mahindra added.
As part of the agreement, Mahindra will also sell between 500-1000 electric vehicles in Maharashtra this year.
The Maharashtra government has launched a policy on electric vehicles, coaxing a players such as M&M, Tata Motors and JSW Energy to submit proposals worth Rs 10,000 crore to build plants in the state.
The policy, which was approved in February this year, aims at manufacturing 500,000 electric vehicles in the state within the next five years.
The state government has also proposed exempting e-vehicles from road tax and registration charges and sweetened the offer for consumers by offering a 15% subsidy for the first 100,000 buyers of electric vehicles registered in the state.
First Published: IST