Volkswagen has put additional investment for an India-focused electric lineup on hold while it seeks clearer terms on a possible deal with billionaire Sajjan Jindal's JSW Group. People familiar with the situation said VW has already finished design work that could let it scale fast, leaning on a lower cost EV platform originally created for China, but it wants a firmer business plan before committing more cash.
Those people also said VW has weighed using a version of its CMP 21 EV platform in India. Hitting the right price point would require sourcing a larger share of parts locally and assembling the vehicles in country to bring costs down.
Representatives for Volkswagen Group and for JSW did not respond to requests for comment.
The pause mirrors a global drive to rein in spending. VW is targeting about a 15% reduction in investment and has outlined plans to cut tens of thousands of jobs as it grapples with soft demand in Europe and fiercer competition from Chinese automakers.
Separately, VW had already decided last year to shrink the India EV development budget by roughly one third while it looked for a domestic partner, according to prior reporting. After discussions with Mahindra collapsed, the company has devoted almost two years to finding an Indian partner.
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VW sells no battery powered models in India under either the Volkswagen or Skoda badges, leaving the field to rivals including Tata Motors Passenger Vehicles, Mahindra & Mahindra, SAIC's MG brand partnered with JSW, and foreign entrants such as VinFast, Tesla and BYD. The company wants to break into India's larger, faster growing market, where its presence is minimal and largely through Skoda Auto Volkswagen India.
VW and JSW said in the prior month that they are examining a joint effort to develop, manufacture and market cars for India and for overseas sales, spanning internal combustion, battery electric, plug in hybrid and hybrid models. Slowing spend now could push out VW's timing to compete more effectively, even as tighter fuel efficiency standards are nudging automakers toward more electrified lineups.
India's EV market is still small in absolute terms, but momentum is building as cheaper options arrive. Electric passenger vehicle registrations in September were almost twice the year earlier level, topping 35,000 units, according to the country's vehicle registration database.
The bottom line: VW's next moves in India hinge on how its talks with JSW shape up and how far its global cost cuts go. Watch for signals on local sourcing, plant commitments and export plans, because those will determine whether VW can make CMP 21 based models cost competitive at scale. Any delay lengthens the window for incumbents like Tata and Mahindra - and for global challengers such as BYD and Tesla - to cement share.
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