Volkswagen has no plans to launch electric vehicles in India

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Most carmakers may be busy drawing up strategies for India’s electric vehicle market, but German giant Volkswagen feels the market is not mature enough for EVs at this stage, given the premium pricing of such vehicles and the lack of charging infrastructure in the country.

At a global press conference organised on Thursday in Germany to discuss the way forward for VW in e-mobility, Ralf Brandstätter, Chief Executive Officer, Volkswagen Brand, said the company would keep an eye on markets like India for EV opportunities in the future.

“The infrastructure support for EVs in India is not fully developed.  The market at this stage cannot accept the price point of vehicles such as the ID.4 (based on the MEB platform). We don’t plan to launch the MEB in India anytime soon. Having said that, we keep evaluating markets such as India and the VW brand will come to the market at the appropriate time,” Brandstätter said.

ID.4 is a premium SUV-styled, all-electric vehicle having a certified drive range of 555 km. The car goes on sale later this month in Europe.

VW’s India 2.0 project

Only 3,400 electric passenger vehicles were sold in India in FY20, a drop of 6 percent from the 3,600 units sold in FY19, according to the Society of Manufacturers of Electric Vehicles.

The German company may not be ready to roll out EVs in India now given its aggressive plans under a new strategy that kicked off in 2018. VW is putting its entire focus on the India 2.0 Project, which has entailed a near-total revamp of its operations here.

This includes an investment of Rs 8,000 crore, development and localisation of new products and engines, as well as overhauling sales, marketing and distribution setups. VW has less than a 1 percent share in India’s PV market. In FY20 the company clocked sales of 25,736 units, a drop of 26 percent from FY19.

Price challenge

Developing EVs at more affordable price points is a challenging task for all automakers. This is why India’s top two carmakers — Maruti Suzuki and Hyundai — which control 70 percent of the domestic market, have not been able to launch a sub-Rs 10 lakh electric vehicle.

While Mahindra & Mahindra (M&M) has launched the eKUV under Rs 10 lakh, rival Tata Motors, which is currently the market leader in the passenger EV segment, launched the Nexon EV at under Rs 15 lakh. MG Motor has launched the ZS EV at under Rs 20 lakh while Hyundai’s Kona is the costliest EV on sale in India, with a price tag slightly under Rs 25 lakh.

Big plans

Almost every carmaker is working on developing affordable EVs that can be built in India with a high degree of localisation. These include Maruti Suzuki, Toyota, Renault, Hyundai, Tata Motors and M&M.

Suzuki is even setting up a plant to manufacture batteries in India with the help of two partners. Hyundai is working on a sub-Rs 10 lakh EV tailormade for the commercial segment (taxis).

Luxury carmaker Mercedes-Benz will shortly be launching the EQC, a premium all-electric SUV, in India. Audi and Jaguar Land Rover have promised to bring the e-Tron and the I-Pace, respectively, to India this year.