NEW DELHI -- Volkswagen Group is looking to introduce an entry-level electric SUV in India by the second half of this decade, Piyush Arora, the CEO of its local unit said.
"We are actively working on an entry-level EV. We are evaluating which VW Group platform can be best adapted to build a compact electric SUV in India," said Arora, CEO of Skoda Auto Volkswagen India.
The new electric vehicle would need the volumes to justify a "three-figure million-dollar investment," Arora said.
EVs currently make up just 2 percent of total car sales in India and the government is aiming for 30 percent by 2030. Analysts, however, say that EVs will likely make up just 10-20 percent of total car sales by then.
"Penetration of EVs in India will not be as fast as needed to justify the investment, so we are looking at the possibility of exporting that product," said Arora.
The group's focus on EVs comes down to their favorable taxation structure in India, Arora said, but added that the company may introduce hybrid vehicles if it gets government support.
India taxes EVs at just 5 percent, while the levy on hybrids is as high as 43 percent, just below the 48 percent imposed on gasoline cars.
Kerrigan Advisors’ proprietary annual OEM Survey of over 100 executives reveals that the majority of respondents are worried about the financial impact of Chinese automakers’ growing global market share, and most expect that the EV transition to be slower than expected. The survey also queried executives on their outlooks for dealership valuations and profitability, as well as their expectations for the future of dealer networks and facility requirements.
The automaker will look at exporting the new EV to southeast Asia, Gulf Cooperation Council (GCC) countries and North Africa, just as it has done for its gasoline cars, he said.
With exports, the group is also looking to "leverage" the reducing effort required to build export-ready cars made in India.
"The regulatory and safety changes in India are making the country more globally competitive. Earlier, we needed more effort to produce cars for export from India," Arora said.
VW Group, like larger rivals Maruti Suzuki and Hyundai, counts India as one of its export hubs.
While exports under the VW brand rose more than 80 percent, Skoda's exports are up around four-fold so far this fiscal year.
The company is also extensively testing the Skoda Enyaq electric SUV for a possible launch in India, Arora said, without giving a timeline.
