Mahindra & Mahindra clarified that the recent price cut of XUV700 variants is not linked to Uttar Pradesh's electric vehicle/hybrid vehicle policy but is part of their business strategy to lower the average price point.

The price reduction aligns with the strategy discussed in their February 14, 2024 analyst meeting, aimed at driving growth by lowering average prices.

The company initiated this strategy with the launch of the AX5 select variant in May 2024 and introduced a 3rd-anniversary celebration variant for the higher-end XUV700 for a limited period of four months.

The price cuts are based on material cost savings realized earlier, incorporated into Mahindra's business plan as 'well deliberated' actions.

Shares of Mahindra & Mahindra were down by around 7% as of 2:15 PM, while the overall market benchmark indices were down 0.8%.

The XUV700's monthly volume is around 6,000 units, accounting for 15% of M&M's overall SUV volume, with the top two trims (AX7 and AX7L) making up 50-60% of the sales.

Axis Capital rated M&M with an 'add' and a target price of Rs 3,150, maintaining a positive outlook on the company in the sector.

The policy waives registration fees for strong hybrid and plug-in vehicles, reducing their cost of ownership by 10%, and impacts the tax rates for EVs and hybrids, affecting their market pricing and sales dynamics.