VW downscales EV investments in India
The reason behind these actions is apparently the modest success achieved to date. ‘After almost two decades of presence in India, Volkswagen has only achieved a market share of two per cent there. According to reports, the Wolfsburg-based company is not prepared to continue investing billions in a market that has so far yielded hardly any returns.
The news agency claims to have learned from informed sources that the Indian subsidiary Skoda Auto Volkswagen India has reduced its spending on a new platform for the production of electric vehicles from around $1 billion to around $700 million. A Volkswagen spokesperson did not respond to a request from Bloomberg for comment on the alleged savings.
If the information is accurate, the cost-cutting measure would come at a critical time: stricter emissions regulations will come into force in India from 2027. As Bloomberg writes, these regulations make “it critical for carmakers to switch to cleaner technologies.” However, Volkswagen’s first electric car for the Indian market is not expected until 2028, which is why the company is now looking for alternatives.
This probably also includes the temporary import of electric cars from Europe, but only on condition that a trade agreement is concluded between the EU and India. Until now, electric cars imported into India have been subject to high customs duties, which has already deterred some manufacturers from selling imported electric cars in India, and the market development outlook has not yet been good enough to justify building their own factory there. This summer, the Indian government promised at least some relaxation of import rules, but again on condition that long-term investment is made.
While importing is probably only a stopgap measure for VW, the company clearly favours partnerships for the Indian market. Negotiations with the Mahindra Group failed last year. According to Bloomberg, talks are now underway with several potential partners. These are said to include the JSW Group, the joint venture partner of Chinese manufacturer SAIC, with whom VW in turn works closely in a joint venture in China. Talks with JSW also took place in 2024, but did not lead to any cooperation so far. An Indian contract manufacturer is also said to have been contacted.
This article was first published by Sebastian Schaal for electrive’s German edition.
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