Skoda Auto Volkswagen India Seeks Collaborative Partnership for Electric Vehicle Expansion in India
Skoda Auto Volkswagen Pvt Ltd, the Indian arm of the Volkswagen Group led by Skoda, is actively exploring partnerships to navigate the high upfront investment and risks associated with the gradual adoption of electric vehicles (EVs) in the Indian market. Currently, the company offers a diverse range of vehicles under the Skoda and Volkswagen brands in India.
The company has been testing Skoda Enyaq EV prototypes in India, but a successful foray into the mass market necessitates a localized approach. To address this, Skoda is embarking on a new project codenamed PEAK EV, expected to leverage the MEB21G low-cost EV architecture. This platform aims for extensive localization to maintain cost efficiency, considering the relatively slow penetration of EVs in the Indian automotive landscape.
Given the cautious investment approach due to the evolving EV market in India, Skoda Auto Volkswagen India is actively seeking potential partners to collaborate on the development and manufacturing of highly localized electric cars. Reports suggest that Volkswagen is actively considering a strategic partnership with another automotive manufacturer in India.
The company is willing to consider diluting its ownership of Skoda Auto Volkswagen (SAVWIPL) if there are substantial synergies in terms of platform sharing and parts sourcing. According to insiders, high-ranking executives from Germany are open to discussions with suitable business groups to potentially form an alliance in India. The primary objective is to share the substantial investment required for the transition from internal combustion engine (ICE) to electric vehicle (EV) platforms in the future.
Anticipated Developments
Skoda Auto Volkswagen India is committed to creating a locally manufactured electric car that can be exported to ASEAN nations and other markets. India, being one of Skoda’s major markets outside of Europe, holds strategic importance as a key manufacturing hub. The company plans to expand its portfolio of MQB A0 IN platform-based vehicles while simultaneously driving efforts towards EV adoption in the future.
The PEAK EV project is estimated to require a minimum investment of 1 Billion Euros. Collaborating with a suitable partner will enable Skoda Auto Volkswagen India to share this substantial investment and mitigate associated risks. The PEAK EV platform is anticipated to take shape by the end of the decade, paving the way for the production of affordable, locally manufactured EVs targeting mainstream car buyers in India.
Volkswagen Group has previously explored collaborations, including talks with Tata Motors for a shared platform and engagements with China-based SAIC for platform sharing and production capacity. Notably, the recent agreement with Mahindra & Mahindra involves sourcing VW’s MEB electric car components and unified cells, demonstrating the company’s strategic partnerships in the evolving EV landscape.
