More than a year after Mahindra & Mahindra bought stake in Reva Electric Car Company, the SUV-maker is gearing up to launch its first compact car -- it promises nine times the mileage generated by the country's most fuel-efficient petrol-powered car.

The Reva NXR, due for launch next year, will be only the second follow-up model after the Reva, the country's only all-electric car, was introduced in 2001.

The NXR has done away with all the limitations of the first-generation Reva, which did not find takers in huge numbers due to its impractical attributes like smaller range (leading to repeated charging), limited top speed and seating capacity.

The range of the NXR, for instance, stands at 160 km on a full charge, double the range generated by the earlier-generation Reva. The new car can comfortably seat four adults and generate top speed of more than 100km/hr compared to 80km/hr earlier.

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Chetan Maini, chief of technology and strategy, Mahindra Reva said on Wednesday that the time was "right" to launch such a product in the market with petrol prices breaking new highs.

"Consumers who spend Rs 7,000-8,000 every month on petrol are more interested than ever in alternate fuel technology. The Reva NXR is a huge improvement over the existing model and it will surely get the market excited," he noted.

The NXR, which was unveiled for the first time at the Frankfurt Motor Show in 2009 as a concept, has largely maintained its scheduled launch period of 2012. The Reva NXR designed by Dilip Chhabria will be showcased at the upcoming Delhi Auto Expo, at Mahindra's pavilion.

With a mileage of about 9.6 km for every Rs 3 spent, the Reva NXR claims to be nine times more fuel-efficient than its nearest competitor powered by a petrol engine. At 25kms/litre, the Tata Indica eV2 or the Nano delivers one km for Rs 3 spent.

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Mahindra Reva's non-AC variant currently costs Rs 3.2 lakh (ex-showroom), whereas the AC variant costs Rs 3.7 lakh. Maini refused to share details of the expected price of the NXR, but other company officials say effort is on to make a very cost-effective vehicle.

The plans of setting up one of world's biggest manufacturing bases for electric cars of 30,000 units per annum near Bangalore is one schedule and should be complete in the next few weeks.

The company hopes to be selling products through an expanded network of 100 outlets in the country compared to two outlets a few years ago.

With increased demand for electric cars, especially in countries like Norway, the Mahindra Reva is banking on this new model to churn out higher numbers. The concept of electric cars has suffered in India due to lack of infrastructural support, among other reasons.

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"Norway, with great infrastructure support by the government, is the highest consumer of electric cars in the world. Increasingly we will have more countries joining the list, as oil prices will force people to look at alternatives," added Maini. "Smart electric compact cars with automatic drivetrains will be best suited for congested city roads."

Due to high costs involved in developing the battery technology and lack of government incentives for promotion, electric cars do not come cheap in India. The present generation Reva, sold in three variants, is retailed in 24 countries. The company claims that over 4,000 units of the car are already on roads globally.

It was in May last year that city-based M&M bought 55.2 per cent stake in RECC, for an undisclosed amount, as part of its larger strategy of focusing on sustained mobility. The 1945-founded M&M is also working on electric variants for its own models such as Maxximo, the light truck and Verito, the sedan.