The International Finance Corporation (IFC) intends to invest Rs 600 crores in a new last mile mobility (LMM) company established by Mahindra & Mahindra (M&M) to scale up the country's electric three-wheelers and small commercial vehicles.

The investment will result in IFC owning between 9.97 percent and 13.64 percent of the new subsidiary. It will be IFC's first investment in an electric vehicle project in India, as well as in electric three-wheelers globally.

M&M's investment in last-mile mobility would sum to Rs 850 crore constituting 2.18 percent of its total net worth. The company's existing last-mile mobility operations will be transferred to the newly formed subsidiary.

The new company will have a last-mile mobility division that will include three-wheelers (Alfa, Treo, and Zor) and four-wheeler SCVs (Jeeto). The increased investment in the electric mobility space will hasten the transition to electric vehicles.

The transition to EVs in the two and three-wheeler segments will be much faster than expected. The battery-swapping policy would also assist the E3-wheeler segment.

In December, M&M announced that it plans to invest Rs 10,000 crore over the next seven to eight years to build a factory for electric vehicles, including its upcoming battery electric vehicles (BEVs), such as its e-SUVs sold under the XUV brand.