Volkswagen Cuts India EV Spend, Seeks Local Partner

Volkswagen AG is reducing its expenses for electric vehicle development in India by one-third and is seeking a local collaborator to enhance its small market presence, as per sources acquainted with the situation.

The regional branch of Europe’s largest car manufacturer has reduced expenses to approximately $700 million from $1 billion for a platform it is creating for EV production, according to sources familiar with the situation who requested to remain unnamed.

Volkswagen is reluctant to keep investing billions in a market where it has achieved just a 2 percent market share after almost twenty years. The car manufacturer is seeking a partner in India to jointly manage expenses and risks, following the collapse of discussions with Mahindra & Mahindra Ltd. last year, according to sources. Identifying a supporter is essential for obtaining additional internal funding for the time being, they mentioned.

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Its subsidiary, Skoda Auto Volkswagen India, is engaged in talks with several possible partners, including an Indian contract manufacturer, they mentioned. The firm has additionally contacted JSW Group, the local associate of China’s automotive leader SAIC Motor Corp Ltd, to investigate a potential partnership, the sources indicated. Moneycontrol was one of the local media outlets that covered the discussions with JSW.

A representative from Volkswagen did not reply to an email requesting comments regarding the cost reductions in India.

The Volkswagen Group markets vehicles under the brands Skoda and Volkswagen, as well as a selection of high-end names such as Lamborghini, Audi, and Porsche.