German legacy automaker Volkswagen eyes potential partnership with multinational steel company JSW to produce electric vehicles in India, news platform Money Control reports, citing people directly aware of the discussions.
Negotiations progress
Billionaire Sajjan Jindal’s JSW Group recently inked a deal with the Odisha government for the development of a ₹40,000 crore integrated electric vehicle and battery factory at Cuttack and Paradip.
Now, the Indian steel giant is reportedly discussing a potential joint venture with Volkswagen to manufacture electric vehicles. The negotiations started earlier this month, the people said.
The unnamed sources further suggested that the two companies may agree to an “exclusivity” period to withhold them from discussing with other potential partners.
Interestingly, the German auto brand is also reportedly weighing plans to sell its stake in its Indian arm, Skoda Auto Volkswagen India. Volkswagen is apparently determined to establish a partnership with another Indian automaker to produce electric vehicles. Nonetheless, Skoda Auto remains responsible for Volkswagen’s business in the Indian market.
However, both Volkswagen and JSW omitted to confirm the speculations.
VW plans to produce affordable e-SUV in India
Despite the lack of confirmation from Volkswagen and JSW, Skoda Auto Volkswagen India CEO Piyush Arora previously announced the automaker’s plans to locally produce a low-cost electric SUV in the latter half of the decade. Volkswagen also plans to export the upcoming electric SUV to other countries.
“We are actively working on an entry-level electric vehicle. We are looking at which VW Group platform is best suited to build a compact electric SUV in India.”
Skoda Auto Volkswagen India CEO Piyush Arora (via Electrive)
Volkswagen apparently plans a “three-digit million investment” for the planned electric SUV. Therefore, it would need the volume to justify that enormous investment.
“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.”
Skoda Auto Volkswagen India CEO Piyush Arora
VW’s efforts to deliver affordable EVs
Volkswagen is developing the MEB platform’s streamlined version to support its planned €25,000 models in Europe, including the ID.2.
It is also speculated to have partnered with Renault on a potential joint production of a €20,000 EV. In addition, the German legacy brand has also been developing cheaper electric platforms with its Chinese partners.
On the other hand, previous reports also claim that the planned MEB parts supply to Indian automaker Mahindra is facing delays. Nonetheless, the two companies finalized the deal a few days ago.
The Indian government aims to hit a 30% electric vehicle market share by the end of the decade, a notable increase from the 2% share it held last year. Volkwagen’s potential partnership with an established Indian company can potentially aid that 30% goal by producing low-cost EVs that may appeal to local customers.
