Daijiworld Media Network - Mumbai

Mumbai, Nov 19: In a strategic move to strengthen its foothold in the world’s third-largest automobile market, Volkswagen AG has significantly slashed the cost of developing electric vehicles (EVs) in India by nearly one-third, bringing the investment down to around $700 million from the earlier $1 billion, sources familiar with the development said.

Despite being Europe’s largest automaker, Volkswagen has struggled to gain momentum in India, holding just 2% market share even after almost two decades of operations. With the company unwilling to commit billions more without strong local backing, it is now actively scouting for an Indian partner to share financial risks and accelerate EV expansion.

According to sources, Skoda Auto Volkswagen India—the company’s local subsidiary—has initiated discussions with several potential partners, including a prominent Indian contract manufacturer. The German auto major has also reached out to the JSW Group, which recently entered into an alliance with China’s SAIC Motor Corp, to explore possible collaboration opportunities. Reports of these talks were earlier highlighted in local media, including Moneycontrol.

Volkswagen’s hunt for a partner has gained urgency after its earlier negotiations with Mahindra & Mahindra Ltd. collapsed last year. Insiders say securing a reliable ally is now essential for Volkswagen to obtain further internal approvals and funding for its India EV roadmap.

When contacted, a Volkswagen spokesperson did not respond to queries regarding the company’s revised investment strategy or ongoing partnership discussions.