TL;DR
Volkswagen is cutting Indian EV development costs by a third and actively seeking a local partner to boost its market share and share risks.
Volkswagen AG is significantly reducing its electric vehicle (EV) development costs in India by approximately one-third, bringing the investment down from an initial $1 billion to around $700 million. This strategic adjustment comes as the German automaker aims to bolster its limited 2% market share in India, a market it has been present in for nearly two decades. The company is actively seeking a local partner to share both costs and risks, following previous discussions with Mahindra & Mahindra Ltd. that did not materialize.
Skoda Auto Volkswagen India, the brand's local subsidiary, is reportedly engaging with multiple potential partners, including an Indian contract manufacturer. Discussions are also underway with the JSW Group, which recently formed an alliance with China's SAIC Motor Corp. This move is crucial for Volkswagen to secure further internal funding and to navigate India’s price-sensitive automotive landscape, where local players dominate. The company is also considering short-term options like importing EVs if a trade deal between the EU and India is finalized, given that Volkswagen's dedicated EV debut in India is anticipated around 2028.
