Volkswagen Sparks a Green Revolution: Electrifying 30% of Cars in India

Volkswagen AG's Indian division aims to electrify 30% of its passenger vehicle lineup by 2030 and has revealed plans to develop a dedicated electric vehicle platform for local manufacturing, according to Ashish Gupta, the company's brand director. Gupta stated in an interview that Volkswagen India intends to produce its first electric car for the Indian market, the ID.4, at its Aurangabad plant and potentially launch it in 2024. The ID.4 GTX was showcased for the first time during Volkswagen's annual brand event in Kochi.

Volkswagen India currently carries out "parts and components assembly" similar to a completely-knocked-down assembly for its Tiguan SUV, which will also be utilized for the ID.4. Initially, the ID.4, which is Volkswagen's top-selling electric car worldwide, will be assembled in India. Eventually, the company plans to localize an electric vehicle platform from scratch to achieve economies of scale and competitive pricing. Gupta suggested that this endeavour may involve an investment of €1 billion, aligning with the Skoda Auto Volkswagen India 2.0 project, although an official investment announcement from the group is pending.

Volkswagen's announcement coincides with the efforts of domestic manufacturers Tata Motors and Mahindra & Mahindra, who are expediting their EV adoption strategies to gain an early advantage in India's electric passenger vehicle segment by electrifying their existing internal combustion engine powertrains.

While some other original equipment manufacturers anticipate a 15% penetration of EVs in the private car segment, Volkswagen is more optimistic, projecting electrification levels of 25-30% by 2030. Gupta explained that achieving 30% market share for electric vehicles cannot be sudden due to the unprepared ecosystem and supply chain. He highlighted that around 50% of an electric car's cost lies in the battery, emphasizing the necessity of localized battery manufacturing in India to enable mass electrification. Volkswagen plans to introduce global premium products like the ID.4 to pave the way for mass electrification, and the company's electric car for India will be an entirely new product developed from scratch.

Volkswagen has been conducting testing on the ID.4 in India since 2022 with a targeted launch in 2023. However, Gupta emphasized that the brand is committed to a meticulous process of testing and validating the product for India's distinct terrain and climate conditions, particularly the drivetrain, suspension, and software, which require significant time and investment.