The team is expected to announce a brand new line-up for season two on August 10, the opening day of the official pre-season testing to take place at Donington Park.
Chandhok, who was the sole Indian to compete in the inaugural season of the fully-electric series, told PTI that Mahindra have decided to go for a revamp going into season two beginning in October.
"Ultimately Dilbagh Gill (team principal) has decided he wants to experiment with some changes to the overall team and from my side I am going to step away and spend the next few months refocussing on my options in sportscar racing and also some new projects," said Chandhok, who raced in Formula E alongside his 2010 Formula 1 teammate Bruno Senna.
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"We are very close to deciding on the drivers for the upcoming season. We have tested with a lot of exciting drivers in the past one month and we are evaluating who is best for the team. Whoever comes on board, the bottomline is performance of the team. Last year was disappointing to be honest. We did not perform to our capabilities. It wasn't acceptable to anyone in the team," Gill told PTI from his Boston base.
"There is no real falling out but ultimately we all have to believe in what we are doing and if we don't then the results won't come. I still have a great equation with people at Mahindra and we are speaking about different ways for me to continue working with them on other projects.
"Le Mans this year was a superb reminder for me of just why I enjoy racing and I think when you are enjoying something, you automatically drive better," said the 31-year-old from Chennai.