Škoda Plans USD 1.7 Bn EV Investment In India

New Delhi, Mar 15 (KNN) Škoda Auto is moving forward with plans to manufacture electric vehicles in India, with or without a local partner, according to CEO Klaus Zellmer. 

The Czech automaker is prepared to invest independently if its search for a joint venture partner proves unsuccessful.

Škoda has spearheaded Volkswagen's India strategy since 2018, though with limited success. The Volkswagen and Škoda brands together hold just 2 per cent of India's car market, which sees annual sales of approximately 4 million units. 

However, with stricter vehicle fuel efficiency standards set to take effect in 2027, all automakers will need to introduce electric vehicles—a shift Škoda believes could work to its advantage through access to Volkswagen Group's EV technology.

"We can offer very innovative, very cost efficient solutions for battery electric vehicles, and this is our strategy also for India," Zellmer explained during the virtual call.

While the company already has an agreement with India's Mahindra & Mahindra to supply certain EV components, Zellmer indicated ongoing talks with potential partners having ‘local roots, without naming specific companies.

India has historically been a challenging market for Western automakers, with Japanese Suzuki Motor and South Korean Hyundai dominating the small car segment. 

For Škoda, which has reduced its presence in China and exited Russia, India represents a "major focus" for future business. 

The company has previously expressed interest in a government program offering incentives for local EV manufacturing and has signed a preliminary agreement with Maharashtra state to invest approximately USD 1.7 billion in EV production.

Zellmer emphasized the importance of developing the right product portfolio for India, describing the market as a "gateway" to Southeast Asia and the Middle East. 

"We are really looking for us building on... one of the biggest potential growth markets globally," he concluded.

(KNN Bureau)