Volkswagen Slashes EV Development Costs by One-Third in India, Eyes Local Partners to Grow Market Share
November 20, 2025
Volkswagen, the German car giant, is making a smart move in India. After nearly 20 years in the market, it holds just a 2% share! To power up its electric vehicle (EV) game, VW is slashing its EV development budget by one-third, from $1 billion to about $700 million. Why? Because spending billions without big gains is not wise! Now, VW wants a local buddy to share costs and risks, making the journey easier and safer.
The hunt for this partner is on! Volkswagen’s India unit, Skoda Auto Volkswagen India, broke talks with Mahindra last year but is now chatting with various Indian companies, including a contract manufacturer and the powerful JSW Group. JSW already partners with China’s SAIC Motor, and VW hopes teaming up with them can light up its local EV dream.
Volkswagen’s spokesperson remained silent when asked about this cost-cutting plan, but insiders revealed the strategy is all about finding the right friend to keep internal funding flowing.
Why all this fuss? From 2027, India will enforce stricter carbon emission rules. Carmakers must switch to cleaner tech fast. VW plans to launch its EVs locally around 2028, but until then, it’s thinking of importing EVs if India and the EU strike a trade deal. This cost trimming also shows VW’s care in balancing investments between India, China, and Western countries.
Even with 20 years of efforts and billions spent, VW hasn’t shifted gears much in India, despite Skoda calling India a key global market outside Europe. However, there is a silver lining: Skoda’s compact, affordable SUV Kushaq is gaining fans!
European car makers like VW find India’s price-sensitive market tricky. Homegrown heroes like Maruti Suzuki, Hyundai, Mahindra, and Tata Motors rule with cheaper, fuel-efficient rides. But with its new strategy of cutting EV costs and finding local partners, Volkswagen is hoping to finally race ahead in the Indian auto market.
Read More at Economictimes →
Tags:
Volkswagen
Electric vehicles
India market
Jsw group
Skoda
Automotive Partnership
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