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Business News/ Companies / News/  VW Group looks to roll out local entry level e-car
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VW Group looks to roll out local entry level e-car

Volkswagen Group is considering introducing an entry-level electric car in India, which, if realized, would make it the first European auto maker to tap into India’s mass-market electric vehicle segment

VW Group looks to roll out local entry level e-carPremium
VW Group looks to roll out local entry level e-car

NEW DELHI : Volkswagen Group is considering introducing an entry-level electric car in India, which, if realized, would make it the first European auto maker to tap into India’s mass-market electric vehicle segment. The vehicle, which will likely belong to the lowest or A0 category, will be manufactured in Spain starting in 2025.

The EV may be launched in several markets under the Skoda, Cupra and Volkswagen brands as part of Volkswagen’s Accelerate strategy to become the top brand in sustainable mobility. It’s unclear if the entry-level car will be made in India as well.

“Our ambition is definitely to get into the entry segment of EVs in Europe, India and rest of the world," Piyush Arora, managing director and chief executive of Skoda Auto Volkswagen India, said in an interview. “The VW group is looking at an A0 segment EV for the European market. So we are definitely looking at the possibility of whether that product would be the right one for the Indian market," he said.

“As part of that, we are evaluating the possibilities of a product that will then fit into the Indian requirements of an entry-level EV. An entry-level EV that can be in the range of around less than €20,000 is what is being targeted in Europe, and we’ll have to correspondingly see to what level can we bring that to India," Arora said.

Volkswagen’s global EV portfolio under the ID brand houses primarily mid and premium vehicles. In India, Audi and Porsche’s luxury car units have been offering a range of high-end luxury cars since 2021. While Audi has several electric cars under its E-tron brand, Porsche has the ultra-luxury Taycan on offer in India.

However, like most auto makers with Indian operations or ambitions to join its electrification journey, Arora believes mass-market adoption for the technology will only come towards the second half of the decade when charging infrastructure, the evolution of the electric powertrain and the robustness of supply chains will be in a position to support widespread adoption. EVs currently account for only 1.5-2% of the total passenger vehicle market in India.

Meanwhile, the automotive group is preparing to launch two premium EVs—one each from the Skoda and Volkswagen brands, respectively—in the next 12-18 months. “In terms of prioritization, at this point in time (depending on charging infrastructure and all constraints), we believe demand for our products will remain limited to a particular number, and for that, the best-suited products will be the ones we are testing here—the ID.4 and the Enyaq," Arora said.

“While we are present in the EV space through our luxury brands, we are looking at the possibility of getting into the Indian EV market through our premium brands as well. As part of our product expansion strategy, we are considering products under both brands at this point in time. We have brought in Volkswagen ID.4 and the Skoda Enyaq for experimental drives in the country," he added.

The company could explore importing cars in a completely built-up (CBU) form if it helps with faster entry into the market.

According to Arora, the Indian automotive sector’s EV adoption has moved faster than previously assessed. The Indian electric passenger vehicle market may touch 800,000 to one million units by 2030, he said.

“The market currently is limited at 1-2% penetration. From a medium to long-term perspective—at the turn of the decade or so, that is—the expectation varies from 15-25% penetration. The Indian passenger vehicle market has been growing at a CAGR of close to 4% for the last four or five years; it is likely to continue to grow at that pace. I would believe there will be a substantial market by 2030 for electric vehicles as well because if the penetration is indeed anything between 15-25%, on the 4.5-5 million vehicles that the PV market will grow to, then it’s still a substantial market 800,000 to one million cars", Arora added.

“Our expectation is that in the second half of this decade, we will definitely see some amount of movement in all directions, where the product enhancement happens in terms of charging and range and development in charging infrastructure. This can then lead to a good penetration of the electric vehicle market. This is what we’re hoping for and planning for, and that is when we want to get into the space as well," he added.

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Alisha Sachdev
Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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Updated: 10 Feb 2023, 06:17 AM IST
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