Volkswagen to Launch Electric SUV in India in 2023 to Compete with Tata, Kia, and Ola
- ByStartupStory | April 20, 2023
German carmaker Volkswagen is reportedly set to enter the Indian electric vehicle (EV) market next year with the launch of its premium electric SUV, the ID.4. The company aims to compete with established players such as Tata Motors, Hyundai, and Kia, as well as new entrant Ola Electric, led by Bhavish Aggarwal. According to a senior Volkswagen official, the ID.4 vehicles will be assembled in India at the company’s Aurangabad plant using imported parts and components to tap into the rapidly growing EV space in the country.
German car manufacturer Volkswagen aims to introduce its premium electric SUV ID.4 in India next year, competing with other electric car offerings from Tata Motors, Hyundai, and Kia, as well as Ola Electric’s upcoming electric car. According to a senior Volkswagen official, the EVs will be assembled in the company’s Aurangabad plant, with imported parts and components. Volkswagen intends to derive 25%-30% of its total sales in India from EVs by 2030, while the remainder will come from internal combustion engine (ICE) vehicles. Volkswagen Passenger Cars India Brand Director Ashish Gupta stated that the company is following a two-pronged approach of premiumisation and electrification to strengthen its presence and improve its position in India. At its Annual Brand Conference in Kochi, Kerala, Volkswagen India unveiled its ID.4 GTX electric SUV car, indicating Volkswagen’s focus on strengthening its offerings for the ICE market in India.
German automaker Volkswagen plans to increase its sales growth by 40%-45% this year in India with the launch of new variants of its existing internal combustion engine (ICE) car models. However, Volkswagen Passenger Cars India Brand Director Ashish Gupta acknowledged that the ecosystem for electric vehicles (EVs) in India is not yet fully ready. Gupta stated that the cost of the battery is about 50% of an EV’s total cost and that mass localisation of battery manufacturing in India is required for mass electrification to occur. Nevertheless, he emphasized that electrification in India’s domestic market should begin in stages, starting now.
Volkswagen is looking at launching its first electric car in India next year, with plans to assemble its premium electric SUV ID.4 at its Aurangabad plant. The company aims to achieve 25%-30% of its total sales in India from EVs by 2030, while continuing to offer internal combustion engine vehicles. Despite challenges such as an underdeveloped supply base, Volkswagen is committed to electrifying the domestic market and hopes to introduce a mass electric car by 2026-27. It’s worth noting that unlike Western markets, where cars have driven EV adoption, two- and three-wheelers are leading the charge in India.
Supported by the FAME-II scheme, which promotes EV adoption, the sales of electric vehicles (EVs) in India have surged in the last two years, particularly in the two- and three-wheeler segments. The year 2022 marked the best year in terms of EV sales, with electric two-wheeler registrations reaching 630,000 units from 150,000 in 2021, and electric three-wheeler registrations reaching 350,000 units from 160,000. Although range anxiety still poses a challenge to the adoption of EVs, particularly for long-distance travel, the segment is gradually gaining traction. Many new players, along with established automakers such as Tata Motors and Hyundai, are entering the EV space. Ola Electric revealed its plan to introduce its first electric car in 2024 last year, while Pravaig, based in Bengaluru, is producing electric SUVs.
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