Skoda plans to make electric cars in India

Skoda Auto, which has been given charge of leading the Rs 8,000-crore India investments by European auto major Volkswagen, plans to manufacture electric cars in the country, but the EV debut will be made even earlier through the imported route with the launch of the green SUV Enyaq.

Skoda Auto global chairman Thomas Schaefer said that electric mobility is a major focus area for the company globally, and India — through its policy incentives — will also be a key market for green vehicles.

The plans could see the India subsidiary — Skoda Auto Volkswagen India — have nearly 30% of its local portfolio run on electric powertrains by the end of this decade. While this will still be lower to the 50-70% green fleet global ambitions that it has in the same period, the company wants a greater engagement in India by having a deep-rooted local manufacturing set-up. “If you don’t go into deep localisation, it will never be feasible,” Schaefer said, adding, the company could indigenise “right down to the cell factories”. He said localisation is critical to ensure affordability.

India EV plans by the VW group come at a time when companies such as Tata Motors, Mahindra & Mahindra and Korean twins Hyundai-Kia are looking to massively scale up green efforts and investments.

Schaefer said while localisation is important for a sustainable and critical sales mass, the government should initially allow companies to test-market global products by lowering import duty. “Electric cars can’t be penalised. If you believe that this is the future, then till the time until they are localised in India, you cannot penalise them (with higher duty). Otherwise, you will stop the development and you stop the movement in the market and you lose connection with the rest of the world.”

Schaefer’s demand for lower import duty on electric cars mirrors the plea made by Tesla founder Elon Musk as well as other players such as Mercedes-Benz.

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