German legacy automaker announced plans to launch an entry-level electric SUV in the Indian market by the second half of the decade, Reuters reports, citing the Skoda Auto Volkswagen India Chief Executive’s remarks at a Thursday event.
Plan details
Skoda Auto Volkswagen India CEO Piyush Arora confirmed the German automaker’s plans to bring an entry-level electric SUV model to India by H2 2030 at the Bharat Mobility Global Expo event that commenced on February 1.
“We are actively working on an entry-level EV. We are evaluating which VW Group platform can be best adapted to build a compact electric SUV in India.”
Piyush Arora, Skoda Auto Volkswagen India CEO
CEO Arora further noted that the company would require the volumes to “justify a three-figure million-dollar investment” for the new electric vehicle model development.”
Volkswagen’s local unit also disclosed plans to export the new model to Southeast Asia, Gulf Cooperation Council nations, and North Africa.
“Penetration of EVs in India will not be as fast as needed to justify the investment, so we are looking at the possibility of exporting that product.”
Piyush Arora, Skoda Auto Volkswagen India CEO
Why India?
Volkswagen forecasts that the electric vehicle uptake in India will pick up by the end of the decade, making it an ideal market for the company.
In addition, the German automaker acknowledges India as one of the countries with the most supportive governments when it comes to the automotive industry. Moreover, India is currently one of its export hubs, according to the automaker.
According to the report, India’s “favourable taxation structure” prompted the automaker to focus on electric vehicles there. For context, India reportedly taxes electric vehicles at 5%, while hybrid vehicles‘ taxes reach 43%. For comparison, India taxes petrol-powered cars at 48%.
“The regulatory and safety changes in India are making the country more globally competitive. Earlier, we needed more effort to produce cars for export from India.”
Piyush Arora, Skoda Auto Volkswagen India CEO
Volkswagen’s EV presence in India
Notably, VW currently has no electric car offering in the Indian market. Nonetheless, a wide range of its EV models are already present in the global markets.
The Volkswagen ID.2 remains its entry-level electric car. It is interesting to note that VW recently teased a new entry-level SUV, but it remains unclear if it would be the same one it plans for the Indian market.
Volkswagen’s plans to launch a new entry-level EV model in India will significantly aid the government’s efforts to have EVs account for at least 30% of all passenger vehicle sales by 2030.
